Real estate contingencies: the 5 that actually matter
Contingencies are the escape hatches in your offer. Used well, they let you back out with your deposit intact. Waived carelessly, they hand the seller your earnest money the day something goes wrong. Here's what each one does and when to keep, shorten, or drop it.
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Short answer
What is a contingency in real estate?
A contingency is a condition in a purchase contract that must be met for the deal to close. If it isn't met by the deadline and the buyer gives written notice, the contract cancels and the earnest money is refunded. The five standard ones — inspection, financing, appraisal, title, and home sale — cover the most common ways a deal can fall apart.
The core five
The 5 contingencies on almost every deal
- Inspection contingency (7–14 days): right to inspect the property and either negotiate repairs, request a credit, or walk. This is your only structured shot at surfacing defects.
- Financing contingency (21–30 days): deal is contingent on your lender formally approving the loan. Without this you owe your deposit even if underwriting denies you.
- Appraisal contingency (14–21 days): if the property doesn't appraise at contract price, you can renegotiate or walk. Waive this only if you can cover the gap in cash.
- Title contingency: title company must deliver clean, marketable title. Rarely an issue but non-negotiable — keep it always.
- Home-sale contingency: your offer only firms up once your current home closes. Sellers avoid these in competitive markets; consider bridge financing instead.
When to waive
Which contingencies you can actually waive
Safer to waive: appraisal (with cash reserves and strong comps), home sale (with bridge loan). Both remove seller risk without exposing you to hidden physical defects.
Risky to waive: inspection. You inherit every undisclosed roof, HVAC, foundation, and sewer issue. If you must waive to compete, at least schedule a pre-offer inspection so you're going in eyes-open.
Never waive: financing (unless paying cash), title. The downside — losing your deposit or inheriting liens — is catastrophic.
Frequently asked questions
Questions buyers ask
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