Form 22E Decoded: FIRPTA Certification and the Sale Contingency in WA Deals
Agents routinely conflate two unrelated jobs Form 22E performs. Here is what each one actually does, where the deadlines live, and where a missed certification window quietly stalls your escrow.
What Form 22E actually carries
NWMLS Form 22E is two tools bolted into one addendum, and most of the confusion in the field comes from treating it as a single thing. It is not the financing addendum and it is not the inspection addendum. Form 22E carries the FIRPTA non-foreign certification on one track and a buyer's sale-of-home contingency on the other. A given transaction might use one function, both, or neither, depending on who the seller is and whether the buyer has a house to sell first.
Keep the form's two jobs mentally separate from the start. The FIRPTA piece is a tax-withholding question about the seller's status. The sale-contingency piece is a timing question about the buyer's existing property. They share a form number; they do not share a deadline, a trigger, or a remedy. When you brief a client on a 22E, name which function is in play so nobody assumes the other one is handled.
The FIRPTA trigger and the non-foreign certification
FIRPTA is the Foreign Investment in Real Property Tax Act. Under it, when the seller is a foreign person, the buyer is the withholding agent and must withhold a percentage of the amount realized on the sale and remit it to the IRS unless an exemption applies. The headline default withholding rate is 15% of the gross sale price, with a reduced rate or a full exemption available in narrow residence-use situations tied to price thresholds and a signed buyer affidavit. This is the buyer's liability, not the seller's, which is exactly why buyers and their closing teams care so much about documenting it.
The clean way out for a domestic seller is the non-foreign certification. By signing the FIRPTA certification on Form 22E, a U.S.-person seller attests under penalty of perjury that they are not a foreign person, which removes the buyer's duty to withhold. The certification carries a default delivery deadline of 10 calendar days. Because that is more than five days, it counts as calendar days under the WA day-counting rule (RCW 1.16.050), not business days. Treat that 10-day clock as a hard escrow item: if the cert is not delivered, the closing agent will hold back the withholding or the file simply does not fund on time.
One caution worth repeating to clients: the certification is not a formality to sign reflexively. It is a sworn statement about tax residency. If there is any question about the seller being a foreign person, an entity, or a disregarded entity, that is the moment to loop in the closing attorney or a CPA before anyone signs.
The sale-of-home contingency and the bump clause
The other half of Form 22E makes the buyer's purchase contingent on selling their current home. It is how a buyer who needs the equity or the debt relief from their existing property writes a competitive offer without committing to two mortgages. The contingency defines a window for the buyer's home to sell and the conditions under which the deal proceeds or unwinds.
The mechanism sellers care about is the bump clause. It lets the seller keep their property on the market while the contingency runs, and if a second, stronger offer comes in, the seller can bump the contingent buyer. Once bumped, the buyer has a short, defined period to either waive the sale contingency and proceed or release the property and walk. The bump keeps a seller from being frozen for weeks on an offer that depends on a house that has not sold. Read the elected timeframes on the actual form every time, because the parties fill them in and they are not always the printed default.
For a buyer client, the trade-off is real and worth stating plainly: a sale contingency protects them from carrying two homes, but it makes their offer beatable. In a market with leverage on the seller's side, expect the bump clause to get exercised. Pull source-dated days-on-market and inventory data before advising, and verify the effective period instead of assuming.
A WA agent's Form 22E checklist
Who signs what: the seller signs the FIRPTA non-foreign certification, because it is the seller's attestation of tax status. The buyer and seller both negotiate and sign the sale-contingency terms and any bump-clause election. Do not let a transaction coordinator auto-populate the cert without the seller actually reviewing what they are swearing to.
What 'non-foreign' actually attests: that the signing seller is a U.S. citizen or resident alien (or, for entities, a domestic entity), so the buyer's FIRPTA withholding obligation falls away. It says nothing about disclosures, title, or the condition of the home. When the seller is an LLC, a trust, an estate, or anyone selling from abroad, stop and route it to the closing attorney or CPA — this is the single most common place agents get out over their skis on tax questions.
When to escalate and why the window matters: bring in escrow, the closing attorney, or a CPA the moment a seller's status is anything but obviously domestic, or the moment the FIRPTA cert is not in hand as the 10-day window closes. A missing certification does not just create paperwork friction; it forces the buyer's side to withhold funds against the IRS, which delays funding and can blow a closing date you calculated off mutual acceptance. SENTINEL flags the 22E FIRPTA window alongside your Form 35 inspection and Form 22A financing deadlines so the certification is not the line item that quietly slips.
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Frequently asked
- What does NWMLS Form 22E do in a Washington transaction?
- It serves two separate functions: it carries the FIRPTA non-foreign certification (a domestic seller's sworn statement of U.S. tax status, default delivery in 10 calendar days) and it documents a buyer's contingency on selling their current home, including the seller's bump-clause rights. A deal may use one function, both, or neither.
- Who pays FIRPTA withholding, the buyer or the seller?
- The buyer is the withholding agent under FIRPTA and is legally responsible for withholding a percentage of the sale price and remitting it to the IRS when the seller is a foreign person. The default rate is 15% of the gross sale price, with reduced-rate or exempt situations tied to price thresholds and buyer residence use. A signed non-foreign certification from a domestic seller removes the buyer's withholding duty.
- What is the FIRPTA certification deadline on Form 22E?
- The non-foreign certification carries a default delivery deadline of 10 calendar days. Because that period exceeds five days, it is counted in calendar days under RCW 1.16.050, not business days. Confirm the elected timeframe on the executed form, since the parties can modify the default.
- What is a bump clause in a sale-of-home contingency?
- A bump clause lets the seller keep marketing the property while a contingent buyer waits for their own home to sell. If a stronger offer arrives, the seller can bump the contingent buyer, who then has a short defined window to either waive the sale contingency and proceed or release the property and walk away.
- Is Form 22E the same as the financing addendum?
- No. In NWMLS practice the financing addendum is Form 22A (21 days) and the inspection addendum is Form 35 (10 days). Form 22E is a distinct addendum handling FIRPTA certification and the buyer's sale-of-home contingency. Conflating them is a common and costly mix-up.