Key Takeaways
- The NWMLS Form 21 (Residential Purchase & Sale Agreement) is the standard contract form used in Washington
- Washington requires earnest money to be deposited within 2 business days of mutual acceptance
- Time is of the essence clauses are standard in Washington contracts, making deadlines strictly enforceable
- Washington contracts typically include inspection, financing, and title contingencies
- Closings in Washington are typically conducted by escrow companies or attorneys
Washington Purchase and Sale Agreements
Real estate contracts in Washington must meet all standard contract requirements plus Washington-specific provisions.
Standard Contract Requirements
For a valid Washington real estate contract:
| Requirement | Description |
|---|---|
| Competent Parties | Legal age (18+) and mental capacity |
| Offer and Acceptance | Meeting of the minds |
| Legal Purpose | Transaction must be lawful |
| Consideration | Something of value exchanged |
| Written Form | Statute of Frauds requires writing |
| Legal Description | Property must be identifiable |
The NWMLS Form 21
The Northwest Multiple Listing Service (NWMLS) Form 21 is the standard residential purchase and sale agreement used in Washington:
Key Form 21 Provisions
| Section | Purpose |
|---|---|
| Purchase Price | Total price and payment terms |
| Earnest Money | Amount, holder, and deposit timeline |
| Financing | Loan type, amount, and contingency |
| Inspection | Inspection period and buyer rights |
| Title | Title insurance and contingency |
| Closing | Date, location, and costs |
| Addenda | Additional negotiated terms |
Earnest Money Requirements
Per Washington practice:
- Must be deposited within 2 business days of mutual acceptance
- Held by escrow company or designated holder
- Amount is negotiable between parties
Exam Tip: The 2 business day deposit requirement is important. Business days exclude weekends and legal holidays.
Key Contract Provisions
Time is of the Essence
Washington contracts typically include a "time is of the essence" clause, meaning:
- All deadlines are strictly enforceable
- Missing a deadline can be grounds for default
- Extensions must be in writing and agreed by all parties
Inspection Contingency
The inspection contingency allows the buyer to:
- Have the property professionally inspected
- Request repairs or credits
- Terminate if significant issues found
- Negotiate based on findings
Typical inspection period: 10 days (negotiable)
Financing Contingency
The financing contingency protects the buyer if:
- Loan application is denied
- Loan terms change significantly
- Appraisal comes in below purchase price
Buyer must apply for financing promptly and pursue approval diligently.
Title Contingency
Buyer has the right to:
- Review preliminary title commitment
- Object to title defects
- Require seller to clear title issues
- Terminate if title cannot be made marketable
Contract Amendments
Changes to the contract after mutual acceptance require:
| Change Type | Method |
|---|---|
| Minor changes before acceptance | Counter-offer |
| Changes after mutual acceptance | Written addendum signed by all parties |
| Extension of deadlines | Written addendum |
| Price changes | Written addendum |
When the Contract Becomes Binding
A Washington purchase contract becomes binding upon mutual acceptance:
- Offer made by buyer
- Acceptance by seller (no changes = mutual acceptance)
- Communication of acceptance to buyer
- OR Counter-offer accepted by other party
Note: Any change to the offer creates a counter-offer, which must be accepted to create mutual acceptance.
Within how many business days must earnest money be deposited in Washington?
What does "time is of the essence" mean in a Washington real estate contract?