Contingency
A condition in your purchase contract that must be met, or you can back out without penalty.
In plain English
A contingency is a clause in your purchase agreement that makes the sale conditional on something specific happening, like the home passing inspection, appraising at value, or you securing financing. If the condition isn't met, you can typically cancel the contract and keep your earnest money.
Contingencies are your main protection against something going wrong after you're under contract, waiving them to make your offer more competitive is a real risk worth understanding first.
Ask your agent what happens to your earnest money under each specific contingency in your contract if you need to cancel, and exactly how many days you have to act on each one.
Waiving a contingency to look more competitive is sometimes treated as a formality. It isn't: an inspection or financing contingency is usually the only thing standing between a serious problem and losing your earnest money.
Where you'll run into it
Guides and tools on TheBuyingPath that cover contingency in context.
Related terms
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