What a contingency does
When you accept an offer, the contract sets out conditions that must be met before the sale closes. Each contingency has a deadline. If the condition isn't met by then, the buyer may be able to cancel or renegotiate.
Once a deadline passes or the buyer removes a contingency, that protection usually ends and the deal gets firmer.
The common contingencies
- Inspection: the buyer can inspect and ask for repairs or credits, or cancel
- Appraisal: protects the buyer if the home appraises below the price
- Financing: lets the buyer cancel if their loan isn't approved
- Sale of the buyer's home: the buyer needs to sell their current home first
- Title or HOA review: lets the buyer review title and association documents
Why deadlines matter as much as the list
Two offers with the same contingencies can carry very different risk. A 7-day inspection period ties up your home for less time than a 14-day one. A financing contingency that ends two weeks before closing tells you sooner whether the deal is solid. Ask your agent to lay out each offer's deadlines side by side.
Home sale contingencies and kick-out clauses
An offer that depends on the buyer selling their home adds the most uncertainty, since their sale has its own risks. If you're open to it, a kick-out clause can help. It lets you keep showing your home, and if another offer comes in, the first buyer gets a set time to remove the contingency or step aside.
How to weigh contingencies when comparing offers
A slightly lower offer with few contingencies and a well-documented buyer may be more likely to close than a higher one full of conditions. Look at the price, the contingencies, the deadlines, the buyer's financing and their earnest money together.
Waived contingencies
Some buyers waive contingencies to stand out. That can make an offer stronger, but it shifts risk to the buyer. As a seller, still look at whether the buyer has the cash and financing to follow through.
