Definition
A condition that must be satisfied for the deal to proceed—inspection, appraisal, financing approval. Contingencies protect buyers but concern sellers. Removing contingencies strengthens offers in competitive situations.
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Common contingencies include financing (loan approval), inspection (no major defects), appraisal (home value justified), and title (clear ownership). If contingencies aren't met, buyers can exit. Contingencies protect both parties by setting clear conditions.
Pro Tip
In competitive markets, reducing contingencies makes offers stronger. Understand risks before waiving.
Example
A financing contingency means the sale only closes if your mortgage is approved. An appraisal contingency means the home must appraise for at least the purchase price.