Contingency
A condition in the contract that has to be met before the sale can close. Common ones cover financing, inspection, and appraisal. If a contingency isn't met by its deadline, the buyer can usually walk away and get earnest money back.
Your Room opens on this part of the sale, with the offer and everything before it already ticked.
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See how it worksWhere this comes up in a sale, and what follows
- Review offers and negotiate (comes before)
Part 1 of 4
Why a seller cares
Each contingency is a door the buyer can leave through with their deposit. An offer's price is the loud number; its contingencies are the quiet ones that decide how likely it is to close.
Part 2 of 4
A simple example
Two offers at $300,000. One has inspection, appraisal and financing contingencies; the other is cash with only an inspection contingency. The second has one door out instead of three.
| The contingency | What lets the buyer leave |
|---|---|
| Inspection | Anything the report finds, inside the window |
| Appraisal | A value under the price that you will not fix |
| Financing | A loan that is not approved by the deadline |
| Home sale | Their own house not selling first |
Every contingency is a way the deal can end with the deposit going home. Fewer doors is a stronger offer at the same price.
Part 3 of 4
What people get wrong
That a higher price is always the better offer. A price with four contingencies behind it is a maybe; a slightly lower price with one is closer to a yes.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines contingency in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.