What Is a Contingency Removal and What Happens After I Remove Contingencies in San Diego?

What Is Contingency Removal?

Contingency removal is the formal process by which a buyer waives their right to cancel under a specific contingency — transitioning from a protected period to a committed purchase. In California, contingency removal is done through the active removal process: the buyer signs a Contingency Removal (CR) form specifically identifying which contingencies are being removed.

The California Active Removal Standard

California uses active contingency removal — contingencies do not automatically expire at the end of the contingency period. The buyer must affirmatively sign the CR form to remove each contingency. If a buyer does not remove a contingency, the seller can issue a Notice to Perform giving the buyer 2 business days to remove or the seller can cancel the contract.

What Happens After Contingency Removal

• You are committed: Once all contingencies are removed, you are legally obligated to complete the purchase
• Your earnest money is at risk: If you cancel without a valid legal reason after removing contingencies, the seller may claim your deposit as liquidated damages
• Escrow proceeds to close: Lender finalizes the loan, escrow prepares closing documents, and the close of escrow timeline runs to completion
• Final walk-through occurs: You have the right to a final property inspection within the last 5 days before close

Removing Contingencies Partially vs. All at Once

Buyers can remove contingencies individually as each one is satisfied — removing the inspection contingency at day 17 while keeping the loan contingency active until day 21. Sellers sometimes prefer full contingency removal at once. Your buyer's agent negotiates the removal timeline as part of the overall transaction management.

Never Remove Contingencies Prematurely

Some buyers feel pressure to remove contingencies early to please the seller or listing agent — before their lender has fully approved the loan or before the inspection is complete. This is a significant mistake. Rieder Homes Group advises every buyer to remove contingencies only when the underlying condition is genuinely satisfied — not before.

Related Reading on RiederHomes.com:

→ Blog #89: Contingencies Explained

→ Blog #95: Can I Back Out?

→ Blog #87: Earnest Money

→ Blog #86: Making an Offer

— Mance Rieder, Broker Associate | Rieder Homes Group | REAL Broker | riederhomes.com | 858-295-0556