What Is a Real Estate Contingency?

A contingency in real estate is a condition that must be met before a transaction can move forward. Common contingencies include financing approval, home inspection results, or appraisal value. These clauses protect both buyers and sellers by setting clear expectations and allowing either party to withdraw without penalty if terms aren’t satisfied.

In my experience, contingencies create necessary safeguards. They ensure that buyers don’t lose their earnest money if unforeseen issues arise and give sellers structured timelines for resolution. The key is balance — too many contingencies can make an offer less competitive, but too few can increase risk.