Contingencies: The Unsung Heroes of Your Home Offer
You found the one — a home that checks your boxes and maybe even has that bonus sunroom you never knew you needed. You’re ready to make an offer. But before your earnest money jumps into escrow, let’s talk about the clauses that protect you if things go sideways: real estate contingencies.
In short, contingencies are your contractual “get out of jail free” cards — escape hatches that let you walk away from a deal if certain conditions aren’t met. They’re not about being indecisive; they’re about being smart.
What Is a Contingency in Real Estate?
A contingency is a condition written into your purchase agreement. If the condition isn’t met, you have the legal right to walk away — usually with your earnest money intact.
Without contingencies, you’d be gambling a hefty deposit on faith alone. That’s fine for poker, but not ideal for a 30-year mortgage.
The Most Common Buyer Contingencies
1. Inspection Contingency
This gives you the right to inspect the property — professionally, please — and walk away if serious issues are found. It’s your chance to make sure the charming cottage doesn’t come with foundation drama or a mold problem named Carl.
2. Appraisal Contingency
Used with financed purchases, this ensures the home appraises for at least the purchase price. If it doesn’t, and the seller won’t budge on price, you can walk.
3. Financing (Mortgage) Contingency
If you’re applying for a loan and your financing falls through — maybe due to job change, credit issue, or a surprise from the underwriter — this clause protects your deposit.
4. Sale of Current Home Contingency
This means your purchase is dependent on selling your current home first. Not always loved by sellers, but helpful if your budget needs a clean exit.
5. Title Contingency
You can back out if the property’s title isn’t clear — such as existing liens, disputes, or missing heirs from 1952.
Should You Waive Contingencies to Compete?
In a hot market, it’s tempting. Sellers love clean offers. But proceed with caution:
- Waiving the inspection means accepting the home as-is, no matter what.
- Waiving the appraisal means covering the difference out-of-pocket if the value comes in low.
- Waiving the financing means your earnest money is at risk if your loan is denied.
If you’re considering waiving anything, talk to your agent first. Like, immediately.
Contingency Timelines Matter
Most contingencies come with deadlines. Miss them, and your protection may evaporate. Common examples:
- 7–10 days for inspections
- 14–21 days for loan approval
- Through closing for title clearance
Your real estate agent will help you track these — but set calendar reminders just in case.
Real-Life Example: Why Contingencies Save More Than Money
A buyer fell in love with a vintage home, wrote an offer, and secured a 10-day inspection contingency. The home looked fine… until the inspector uncovered roof rot and outdated electrical wiring that would’ve made Edison nervous. The buyer walked. Because of the contingency, they kept their $6,000 earnest money and lived to browse another day.
FAQ
Q: Are contingencies standard in every offer?
Most are common, but every offer is different. Your agent will customize based on your needs and market conditions.
Q: Can I add custom contingencies?
Yes! You can include conditions like HOA doc review, repair limits, or even radon testing. Just don’t go overboard — sellers want simplicity.
Q: What happens if I miss a deadline?
You might lose the ability to cancel under that contingency. Set reminders and communicate often.
Q: Do cash buyers need contingencies?
Even cash buyers can (and often should) use contingencies — especially for inspections and title review.
Final Thoughts
Contingencies aren’t signs of weakness — they’re signs of wisdom. They give you a path to back out gracefully if things don’t go as planned. More importantly, they give you negotiating power, peace of mind, and protection when dealing with six-figure decisions.
And if you’re not sure which ones you need? Ask your agent or lender (hi, that’s us). We’ve been through this before — and we’ll make sure your dream home doesn’t turn into a financial nightmare.
