CA Law for Loan/Financing Contingency

[kgulbransen]

This is in California.

We are in a 45 day escrow for selling our house. We have just one contingency (financing). Terms were reasonable to us (30 year fixed at 7% with 2 points). They originally asked for 17 days. In the counter offer, we asked for 14. They agreed and all parties signed.

The contract states that the financing contigency was to be lifted on Tuesday and an additional $3000 was to be added to the total earnest money pot on Wednesday. As of Thursday, neither has happened and our agent has not heard from the buyer's agent.

My question is concerning a statement made by our agent. She states that, "the fourteen days doesn't really matter. By California law the buyer has 17 days on the financing contingency."

Although I've bought and sold many properties in California, I've never heard of this. If it's true, then what's the point of having a specified time period on the financing contingency if California law trumps it?

Second question, if the buyer cannot obtain financing and pulls out of the contract as a result, we do NOT get the earnest money, correct?

Thank you!