What Are Some Common Contingencies In a Real Estate Agreement

In a real estate contract, contingencies are conditions that must be met for the transaction to move forward. They protect both buyers and sellers by allowing the contract to be canceled or renegotiated if certain requirements aren’t satisfied. Here are the most common ones, explained clearly:

Common Buyer Contingencies
1. Financing (Mortgage) Contingency
Allows the buyer to cancel the contract if they cannot secure a mortgage within a specified time frame.

2. Home Inspection Contingency
Gives the buyer the right to have the property professionally inspected and to request repairs, renegotiate the price, or walk away if major issues are found.

3. Appraisal Contingency
Protects the buyer if the home appraises for less than the purchase price. The buyer can renegotiate, pay the difference, or cancel.

4. Sale of Buyer’s Home Contingency
Makes the purchase contingent on the buyer selling their current home first.

5. Title Contingency
Ensures the seller can deliver clear and marketable title, free of liens or ownership disputes.

6. HOA Review Contingency
Allows the buyer time to review homeowners association documents, rules, and fees and cancel if they are unacceptable.
Seller-Oriented or Mutual Contingencies

​7. Home Sale Kick-Out Clause
Allows the seller to continue marketing the home and “kick out” the buyer if another acceptable offer comes in and the buyer can’t remove their contingency.

8. Attorney Review Contingency
Common in some states, this allows attorneys for either party to review and approve the contract within a set period.

9. Insurance Contingency
Allows the buyer to cancel if they cannot obtain homeowners insurance at a reasonable cost.

10. Survey Contingency
Ensures the property boundaries, easements, and encroachments are acceptable to the buyer.

Why Contingencies Matter
Contingencies help manage risk, provide exit strategies, and create clear expectations during the transaction. However, too many contingencies can weaken an offer in a competitive market.