What a contingency does
A contingency is a condition written into your purchase contract. If the condition isn't met by its deadline, you can usually renegotiate or cancel, and in many cases get your earnest money back.
The exact wording matters. Your agent writes these terms into your offer, and your contract controls how each one works.
Common contingencies
- Inspection: lets you have the home inspected and ask for repairs or credits, or walk away
- Appraisal: protects you if the home appraises below the price
- Financing: protects you if your loan isn't approved in time
- Sale of your current home: lets you buy only if your home sells first
- Title review: lets you back out if title problems can't be cleared
How deadlines work
Each contingency has a window, such as a number of days after the contract is signed. You need to act within it, usually by sending a written notice through your agent.
If the deadline passes and you haven't acted, you may lose that protection. Keep a calendar of the dates and stay in touch with your agent and loan consultant.
Waiving a contingency
In a competitive market, some buyers waive one or more contingencies to stand out. That can make an offer more attractive, but it also means you may lose your earnest money if something goes wrong.
For example, waiving the appraisal contingency means you may need to cover a low appraisal with your own cash. Only waive what you can afford to stand behind.
Keeping your offer strong
You don't have to choose between strong and safe. Shorter deadlines can make contingencies less of a worry for the seller while keeping you protected.
A pre-approval also helps. It shows the seller you've already been reviewed by a lender. CapCenter's pre-approval starts with a soft credit check, which doesn't affect your score.
The home-sale contingency
If you need to sell your current home to buy the next one, a home-sale contingency can protect you. Sellers often see it as weaker, so it may work best in a slower market or with a short timeline.
A CapCenter agent can write one into your offer and talk through other options, like timing your sale first.
