Soldier to Soldier Hawaii

What are Real Estate Contingences ?

Deciphering the Deal: Understanding Real Estate Contingencies

When navigating the path of buying or selling a home, you’re likely to come across the term “contingency.” This crucial part of real estate contracts can greatly impact a deal. In this article, we’ll dissect what real estate contingencies are and how they can affect your real estate transaction.

###What are Real Estate Contingencies?

Contingencies in real estate are conditions or actions that must be met for a real estate contract to become legally binding. They act as a safety net for buyers and sellers, allowing them to back out of the agreement under specific circumstances without facing legal or financial repercussions.

###Common Real Estate Contingencies

Here are a few common types of contingencies you might encounter:

  1. Inspection Contingency: This allows the buyer to have the home inspected and negotiate or back out if the inspection reveals significant issues.
  2. Financing Contingency: This provides buyers time to secure a loan to purchase the property. If the buyer cannot secure financing, they can cancel the contract without penalty.
  3. Appraisal Contingency: This condition states that the home must appraise at or above the sales price. If the appraisal is lower, the buyer has the option to renegotiate or withdraw from the deal.
  4. Title Contingency: This ensures the seller has a clear title to transfer to the buyer. If issues with the title are found, the buyer can opt-out of the contract.
  5. Home Sale Contingency: This allows buyers to back out if they can’t sell their current home within a specified time.

###How Contingencies Impact a Deal

Contingencies can both protect and pose challenges to the parties involved:

  • For Buyers: Contingencies offer protection. For example, an inspection contingency can reveal issues with the property that might be expensive to repair. The buyer can negotiate repairs, a price reduction, or even walk away if the problems are too significant.
  • For Sellers: Contingencies can pose potential delays or deal breakers. For instance, if a buyer has a home sale contingency and can’t sell their current home, it could delay the sale or cancel it.

Despite their potential to disrupt a deal, contingencies are a critical part of real estate transactions, protecting both buyers and sellers from unforeseen circumstances.

###Navigating Contingencies

Here’s how you can effectively navigate contingencies:

  • Understand Each Contingency: Ensure you understand what each contingency in your contract means, how it affects the transaction, and the timeline it imposes.
  • Negotiate: Contingencies are negotiable. The number and types of contingencies can be adjusted to accommodate the unique needs of the buyer and seller.
  • Work with a Professional: A seasoned real estate agent or attorney can guide you through the complexities of contingencies, helping you understand and negotiate them effectively.


While real estate contingencies can add a layer of complexity to a deal, they play a vital role in protecting both buyers and sellers. By understanding and effectively navigating contingencies, you can ensure a smoother, more secure real estate transaction. As always, seek guidance from real estate professionals to fully understand your contract and the contingencies within it

Celester Thomas

Company Blog – Soldier to Soldier Hawaii Realty

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