5 Contingencies You Should Never Take Off a Home Offer

The property inspection and home appraisal are two essential home-buying contingencies that should not be taken off of the offer. Here are the other three.

Tom Monaghan
Tom Monaghan

Home buying contingencies are contractual terms that need to be met in order to move forward with a real estate purchase.

When a buyer makes an offer on the property, they write up an official document outlining all of the terms and conditions that they are proposing for the transaction.

If the seller chooses to accept the buyer’s offer, they will be able to accept as-is or come back with negotiations of their own. Once a middle ground has been established, the buyer and seller write up their official purchasing agreement and move into escrow.

At this point, the buyer and seller are bound to the terms described in the contract. In order to close the deal, all contingencies must be met.

Why Do Buyers Waive Home Buying Contingencies?

When the market is particularly hot and competition is high, buyers often think that the best way to get a seller to accept their offer is to sweeten the deal by waiving certain conditions. By removing the requirements that sellers would have to abide by, the seller may be convinced that your offer is better than others.

You agent can explain to you how each contingency works.

We’ve all probably heard of buyers waiving certain home buying contingencies, but what are the best practices — and words of caution — to keep in mind when doing this?

While contingencies can be waived to gain a competitive advantage on a listing, these clauses are vital safeguards that protect your interests and secure a fair and equitable deal.

It’s true that some contingencies can be waived when it makes sense to do so, but there are some home buying contingencies that you should never remove from your offer.

What Home Buying Contingencies Do You Need to Keep?

As a buyer, these are the five home buying contingencies you should never remove — even if you're trying to make your offer the most appealing.

#1. The Property Inspection Contingency

The property inspection contingency is one of the most basic terms and conditions of your transaction which should never be waived.

Even if you know the seller personally or think the home’s condition looks fine at first glance, you need to have the property officially inspected to identify any hidden defects and issues.

You agent can help you understand the inspection report that's provided to you.

Suppose you risk waiving the home inspection contingency. In that case, you risk purchasing a home that has structural issues, infestations, damage, a history of faulty work, and other problems which can cause major headaches down the road.

#2. A Home Appraisal Contingency

The home appraisal contingency requires that an official appraisal is conducted by a certified appraiser to determine the fair market value of the home. This will ensure that you’re purchasing the home for what it’s worth.

If you are using a mortgage loan to fund your real estate buy, your lender will require a property appraisal to grant your loan. Lenders want to ensure that they are not overlending for the home purchase.

Even when you are not using a home loan, you should still follow the example of your lender and require a home appraisal contingency to avoid paying an inappropriate amount for your new home.

#3. The Title Contingency

The title contingency is a crucial safeguard for home buyers, allowing them to back out of a deal without penalty in case there is a major error on the home title.

The property title is a collection of documents that verifies the legal ownership of the home. In extreme cases, ownership issues can undermine the seller’s ability to transfer ownership rights to the buyer upon closing.

It’s not uncommon for there to be small errors on the title that can be addressed during escrow, which would not prevent your deal from closing. However, you always want to be prepared to face larger issues related to the title with this essential contingency.

#4. A Mortgage Financing Contingency

If you are using a mortgage to finance your real estate purchase, a mortgage financing contingency should never be waived.  

An unexpected change in your finances can cause your transaction to fall through.

This contingency allows you to back out of the deal without penalty in case you are unable to secure a mortgage, or the lending falls through for some reason during escrow. This additional layer of protection should not be overlooked.

#5. A Home Sale Contingency

If you are a current homeowner who will need to sell their home before they are able to purchase a new property, a home sale contingency should never be skipped over. This protects you in case your sale does not go through, allowing you to exit the deal.

However, if you’re a first-time homebuyer or are buying a second home, a home sale contingency would not be necessary.

Talk to Your Top Agent

If you have specific questions about your home buying contingencies, always speak to your top agent. They will be able to provide you with expert guidance, ensuring you are making a competitive and low-risk offer.


To get connected with a top agent in your area, look no further than RealEstateAgents.com!

Tom Monaghan

Tom Monaghan