A Contingency is a condition included in the offer to purchase a home that must be satisfied before the sale can close. If a contingency is not satisfied, the contract to purchase the home may terminate. Often, contingencies contain provisions for the buyer to receive their earnest money back if certain timelines are met. Common contingencies in a home purchase include:
Inspection Contingency – Gives the buyer the ability to inspect the home and negotiate further on repairs needed.
Financing Contingency – Makes the buyer’s offer to purchase contingent on successfully obtaining a home loan.
Sale Contingency – Makes the buyer’s offer to purchase contingent on successfully selling their current home first.
Title Contingency – Gives the buyer the ability to review the title history of the property and object to items found in title records.
Appraisal Contingency – Makes the buyer’s offer to purchase contingent on receiving an appraisal that is equal to or greater than the purchase price.