Common Contingencies When Buying a Home

Buying a home can feel overwhelming, especially when you hear buzzwords like "contingencies." But these are not hurdles, they’re safeguards that give you room to make informed choices. Understanding common contingencies in home buying can help you feel confident, protect your deposit, and avoid surprises. Here’s a clear and friendly guide to the most important ones.

What Are Contingencies and Why They Matter in Home Buying

A contingency is a condition in your offer that must be met before the sale can go through. It gives you an official way to walk away or negotiate if things don’t go as planned. Most sellers expect them, and they help both you and the seller move forward safely.

Inspection Contingency

What it covers:
A home inspection contingency lets you get a licensed inspector to check the home’s condition—roof, HVAC, plumbing, foundation, and more—and request repairs or cancel if serious defects arise.

Why it helps:
You avoid buying a home with hidden problems that could cost thousands.

Tip:
Attend the home inspection if you can. You’ll learn about the home and better understand what needs fixing.

FAQ: What if major defects are found?
You can ask the seller to fix them, renegotiate the price, or walk away without losing your deposit—if the contingency is in your contract.

Appraisal Contingency

What it covers:
This ensures the lender agrees the home is worth the purchase price based on recent comparable sales.

Why it matters:
If the home appraisal comes in low, you might not qualify for the full loan—and you don’t want to overpay.

Tip:
Don’t overbid well above comparable market value just to win a competitive offer.

FAQ: What happens if the appraisal is low?
You’ll need to renegotiate, pay the difference in cash, or cancel, such options depend on your contract terms.

Financing (Mortgage) Contingency

What it covers:
This gives you a way out if your loan application is denied or falls through for any reason.

Why it matters:
It protects your earnest money deposit if you can’t secure financing.

Tip:
Get pre-approved before making an offer and keep your financial documents organized throughout the process.

FAQ: Can I lose my deposit if I can’t get financing?
No, if you have a mortgage contingency and follow the timelines in your contract, you can back out and keep your deposit.

Title Contingency

What it covers:
This allows you to cancel if the title search reveals issues such as liens, unpaid taxes, or ownership disputes.

Why it helps:
It protects you from hidden legal or financial problems tied to the property.

Tip:
Work with a reputable title company that has experience in your local market.

FAQ: What kinds of title issues might come up?
Older homes might have unresolved liens, boundary disputes, or unpaid taxes—all of which can be discovered during a title search.

Home Sale Contingency (Use If Applicable)

What it covers:
This ties your offer to selling your current home first, meaning the purchase only moves forward once your home is sold.

Why it matters:
It prevents you from carrying two mortgages simultaneously, but sellers may view it as less strong than offers without it.

Tip:
Be realistic about the timeline and include buffer time in your contract.

FAQ: What if my current home doesn’t sell?
If your sale contingency remains and expires, you can back out under contract terms. The seller may request a shorter contingency window in competitive markets.

Tips for Navigating Contingencies

• Prioritize based on your needs. If you've already sold your home, skip the home sale contingency. If your financing is solid, emphasize inspection and appraisal contingencies.

• Consider waiving a contingency carefully. In hot seller markets, buyers sometimes waive contingencies to make offers stronger. Only do it if you understand the risk.

• Communicate deadlines clearly. Your agent should help you track all contingency removal dates, so you don’t accidentally miss your window.

More FAQs About Contingencies

How long do I have to remove a contingency?
Each contingency has a deadline, commonly 7–14 days after your offer is accepted. It differs by contract, so check your paperwork.

Can a seller ask to remove a contingency?
Yes. Sellers can push to remove contingencies, and buyers can negotiate which ones to keep or adjust.

Do contingency periods count toward the overall closing timeline?
Yes. Your contract usually starts counting from acceptance, so contingency deadlines must fit within your closing window (often 30–45 days).

Contingencies help both you and the seller move forward safely. They act as checkpoints—ensuring you don’t commit until you’re confident in the home’s condition, value, title, and financing. Smart use of contingencies keeps the process transparent and fair. If you’re unsure which ones to include or drop, talk with your agent—they’ll guide you toward a smooth, informed home buying experience.

You deserve a home you feel good about. These contingencies support that choice while helping you move forward with confidence.