Real estate transactions can be exciting—but also overwhelming, especially for first-time homebuyers. One important aspect of the homebuying process that often confuses buyers is contingencies. These are conditions written into a purchase contract that must be met for the sale to go through. While they may seem like extra hurdles, contingencies are actually in place to protect you, the buyer. Knowing how they work can give you more confidence and help you avoid costly mistakes.
A real estate contingency is essentially a safety net in your purchase contract. It says, "This deal will move forward if certain conditions are met." If those conditions aren’t met, you typically have the option to walk away from the deal without losing your earnest money deposit. Offers with contingencies are very common, especially in markets that aren't ultra-competitive.
Contingent offers can cover a wide range of concerns—from making sure the home passes inspection, to getting your mortgage approved, to selling your current home first. While too many contingencies might make your offer less appealing to a seller, they’re crucial for protecting your investment and your finances.
One of the most important and widely used contingencies is the home inspection contingency. This gives you the right to have the home professionally inspected within a set time period—usually a week or two after your offer is accepted.
During this inspection, a licensed professional will examine the home’s structure, electrical systems, plumbing, HVAC, roof, and more. If major issues are found—like mold, foundation cracks, or a failing roof—you have a few options. You can request repairs, ask for a price reduction, or even back out of the deal entirely.
For buyers, this contingency is a must-have. Without it, you could be stuck with expensive repairs after closing. Even if the home looks perfect on the surface, an inspection can uncover hidden problems that would be a nightmare down the road. It’s one of the best ways to make sure you're making a smart, informed decision before committing to a purchase.
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Connect with Caroline Shook from CMS Mortgages, a licensed mortgage broker, for expert mortgage advice and services.
