Can we add a “neighborhood review” contingency to our purchase offer?

Sellers may not appreciate having the contract depend on you checking out the neighborhood.

Question

We are buying a home in another state and selling our home in Seattle, and we notice that the standard form purchase contract doesn’t contain a “neighborhood review” contingency. When we bought our Seattle home, this contingency gave us three days to check out the surroundings and the crime rate and make sure these were acceptable to us before continuing with the purchase. Can we add this to our contract to buy our next home?

Answer

The so called “Neighborhood Review” clause is fairly unique to Washington state purchase contracts. As you described, it provides the home buyer a three-day period in which to investigate things like the quality of local schools, how close the home is to bus lines and shopping, local noise levels, parking availability, and other environmental and safety conditions.

This clause has been good for helping Washington buyers remember to do things like knock on doors and check on crime statistics. The clause also draws complaints from the Washington real estate industry and sellers, because it gives buyers an easy “out” if they get cold feet and want to cancel the deal. (There’s always something to complain about in every neighborhood!)

So yes, you can add the clause to your purchase contract if you wish. No contract is written in stone, and amendments are always possible. But whether you want to is another question.

Unless your offer is the only one on the table, the seller may not want to sign a deal with you that contains a three-day period of such great uncertainty. This is already true of Washington sellers, and one who’s in another state where this isn’t traditional practice is even less likely to want to provide for this. The seller can, of course, refuse to include that amendment in the contract but continue negotiating the deal with you. But the seller might also turn to another buyer.

Strategically, you’re probably better off checking out the neighborhood in which you plan to buy BEFORE making an offer on a particular house. And once you’ve identified the house that you’d like to buy, it shouldn’t take long to knock on neighbors’ doors, park nearby after dark to see how safe it feels, ask the seller’s agent whether any issues or disputes have arisen with the neighbors, and otherwise refine your sense of whether the house’s precise location is what you’re interested in.

See Nolo's Essential Guide to Buying Your First Home for detailed information on the typical clauses in a home purchase contract.

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