WA CONTRACTS & FORMS — CHEAT SHEET

NWMLS Form 21 vs. Other Jurisdictions

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MUTUAL ACCEPTANCE = START OF ALL DEADLINES

Mutual Acceptance occurs when:

Both parties have signed AND

Signed contract is delivered to the other party/agent

⚠️ Effective Date ≠ signing date. Undelivered signature = no acceptance.

Triggers: Financing contingency period | Inspection contingency period | Earnest money deadline

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EARNEST MONEY — THE 1-BUSINESS-DAY RULE & DISPUTE PROTOCOL

Deposit Rule

• Holder: Listing firm's trust account OR closing agent

• Deadline: 1 business day of receipt (Wed. receipt → Thurs. deposit)

Disputed Earnest Money

When parties cannot agree on disbursement, holder must:

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NWMLS FORM 22A — FINANCING CONTINGENCY

Loan Parameters (Define Scope)

• Loan amount

• Loan type (conventional, FHA, VA, USDA)

• Max interest rate ← buyer protected if rates exceed this

• Max loan fees

Contingency protects buyer only if financing meeting ALL these terms is unavailable.

"Good Faith Effort" Rule ⚠️

Buyer forfeits contingency protection if they:

• Deliberately avoid loan application

• Major credit purchase post-signing

• Quit job post-signing

• Provide false lender information

Real-world trap: Buyer buys car after offer signed → credit score drops → loan denied → earnest money at risk (not a good-faith financing failure).

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NWMLS FORM 22AA — APPRAISAL ADDENDUM

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CONTINGENCY WAIVER — SELLER'S COMPETITIVE ADVANTAGE

Market reality: Competitive markets (Seattle, Bellevue) → buyers waive contingencies Broker duty: Document in writing that buyer was informed of earnest money forfeiture risk if loan denied

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SELLER'S REMEDIES FOR BUYER BREACH

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Aspect	Washington	Texas
Mandatory form	None—NWMLS Form 21 standard by practice	TREC forms mandated
Publisher	Northwest MLS	Texas Real Estate Commission
Custom agreements	Permitted (attorneys)	Limited
Within 20 days of written demand	Action
Option 1	Obtain written mutual release from both parties → disburse per agreement
Option 2	File interpleader action in superior court (20-day deadline is hard)
⚠️ NO indefinite holding	Broker cannot freeze funds without court order
Scenario	Risk Without 22AA	With 22AA
Property appraises LOW	Buyer may owe appraisal gap in cash	Buyer can terminate & recover earnest money
Financing contingency alone	Only protects if financing is *unavailable*; not if buyer must cover gap	Separate protection for low appraisals
Remedy	Requirement
Liquidated damages	Keep earnest money (if no other agreement)
Specific performance	Court order forcing buyer to close (unique property)
NOT: Deficiency judgment	Real property is unique; seller doesn't typically resell to mitigate

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HIGH-YIELD DECISION TREE

`` EARNEST MONEY DISPUTE? ├─ Parties agree in writing? │ └─ YES → Disburse per mutual release ├─ Parties disagree? │ └─ Broker has 20 days of written demand → FILE INTERPLEADER │ (Do NOT freeze funds indefinitely) `

` FINANCING CONTINGENCY EXERCISE? ├─ Buyer made good-faith effort? │ ├─ YES (applied, no denial) → Can terminate, recover earnest money │ └─ NO (bad credit decision, job quit) → Earnest money at risk ├─ Form 22A parameters met? │ └─ NO (rate 7.1% vs. max 6.75%) → Can terminate ├─ WITHOUT 22AA & low appraisal? │ └─ 22A alone may NOT protect → buyer owes appraisal gap ``

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EXAM QUICK HITS

• Effective Date = delivery date, not signing date

• 1-business-day rule = deposit deadline (strict)

• 20-day interpleader rule = hard deadline for disputed earnest money

• Good faith = no major financial moves post-signing

• Form 22AA = separate appraisal protection (not in 22A alone)

• Contingency waiver = broker must document buyer's risk acknowledgment in writing