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
Important: This content covers Washington-specific contract law. You should complete the National Real Estate Exam Prep first, as general contract principles are tested on the national portion.
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?