Main Content

Home » Sellers » Escrow And Contingencies

Escrow And Contingencies


A contingency is a condition that must be met before a contract becomes legally binding. For instance, a buyer will usually include a contingency of a satisfactory home inspection report from a qualified inspector. Before completing his or her purchase of your property, the buyer will likely go over every aspect of the property, as provided for by the purchase agreements and any counterproposals. These include:

  • Title
  • Survey
  • Inspection
  • Appraisal
  • Financing


One of our preferred title companies of your choice will be selected to do the title search, ensure clear title and perform the actual closing. After researching the complete recorded history of your property, they will certify that 1) your title is free and clear of encumbrances (eg. mortgages, leases, or restrictions, liens) by the date of closing; and 2) all new encumbrances are duly included in the title. We have great title companies in Steamboat Springs that we work closely with for a smooth closing process.


If there is a survey requirement in the purchase agreement, it typically falls on the seller to provide either an ILC (Improvement Location Certificate), or an ISP (Improvment Survey Plat) to the buyer for their review by the associated contract deadline. We will make sure you are only required to provide the type of survey that makes sense for your property and if we have the option, we will have the buyer pay for it as part of the negotiation. Once provided, the buyer will typically have 5-7 days to review the survey.


Most buyers will have your property inspected by a local home inspector first and then may follow up with other specialists in such areas as: roof, HVAC, structural, electrical, plumbing, mold, etc. Today, most residential home inspections will include a radon test as well. Be prepared for an inspection objection in most cases that will include either a request for repairs to be made to the property, a credit to the buyer at closing or some combination of the 2. This is a key point of potential negotiation and one where a good negotiator can save you thousands of dollars, and often more importantly, make sure you get to the closing table on your terms with the buyer.


If the agreement is conditional upon financing, then the property will be appraised by an appraiser appointed by a third party management company to determine the value for the lender. This is done so that the lending institution can confirm their investment in your property is equitable and secure. If the appraised value comes in below the agreed upon purchase price, the buyer will almost always object and you have yourself another negotiation that we will guide you through as needed.


If a buyer is obtaining financing to purchase your property, one of the most critical and time consuming contingencies is that of the mortgage which is largely controlled by the financial institution. We will make sure the buyer has provided a pre-qualification or pre-approval letter from their lender, but that is no guarantee that they can close the transaction. This is one part of the process where we are at the mercy of the mortgage broker and lender, but we do every thing we can to keep tabs on them and make sure things are moving in the right direction like making sure they are using local appraisers and have all the information they need to stay on track with the dates and deadlines of the contract.

Depending on the outcome of these contingencies, one of two things may happen:

  1. Either each milestone is successfully met and the contingency cleared bringing you one step closer to the closing; or
  2. The buyer, after reviewing the property or documentation, makes an objection to the condition of the property or the docs provided.

If an objection is made it will often include a renegotiation of the terms or price of the contract which can present a difficult situation… unless you have a seasoned Steamboat Springs real estate agent representing you, in which case, this is par for the course and can typically be worked through. Having dealt with countless real estate negotiations and renegotiations, we understand every aspect of the transaction intimately and can help you navigate even the most complicated objections. We guarantee our full expertise and total commitment to every client, no matter what the situation is.