Contingency
A condition written into a purchase contract — such as financing, appraisal or inspection — that lets the buyer exit and keep their earnest money if it is not met.
What does contingency mean?
A contingency is an escape hatch built into a home-purchase contract. Common ones cover financing (you back out if your loan falls through), appraisal (if the home appraises below the price), and inspection (if it reveals serious problems). Meet the contingency and the deal proceeds; fail it and the buyer can usually walk away with their earnest money returned. Waiving contingencies strengthens an offer but raises your risk.
Frequently asked
What are the common contingencies in a home purchase?
The main ones are financing (you exit if your loan falls through), appraisal (if the home appraises below the price), and inspection (if it reveals serious problems).
Meeting a contingency lets the deal proceed; failing it usually lets the buyer walk away with their earnest money.
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