What Contingencies Are Common in Offers?

Common contingencies in home offers include inspection, financing, appraisal, and title contingencies. Buyers sometimes also include a sale-of-property contingency. These conditions protect buyers and sellers by ensuring the deal only moves forward if key requirements are met.

What Is A Contingency?

When you’re buying or selling a home in San Francisco or Marin, you’ll often hear the term “contingency.” A contingency is simply a condition that must be met for the sale to move forward. Contingencies protect both buyers and sellers by allowing for due diligence and ensuring that everyone understands what needs to happen before closing.

So, what contingencies are most common in today’s offers?

1. Inspection Contingency

Perhaps the most familiar, an inspection contingency gives the buyer time to have the property professionally inspected. If the inspection reveals issues, such as structural concerns, roof leaks, or outdated electrical systems, the buyer can:

Request repairs or credits,
Renegotiate the price, or
Walk away from the deal without penalty.

This contingency provides peace of mind and helps buyers avoid surprises after moving in. I often point out the phrase “at Buyer’s sole discretion,” which appears in the contract. It’s a quick way to understand that the inspection contingency gives the buyer the right to walk away from the deal. In most cases, the listing agent won’t even press for an explanation, since the contract doesn’t require one, though buyers sometimes use this period to negotiate repairs or credits instead of canceling outright.

2. Financing (Loan) Contingency

Unless a buyer is paying all cash, their offer typically includes a financing contingency. This ensures the buyer can secure a mortgage for the purchase. If their lender doesn’t approve the loan, the contingency allows them to cancel the deal and recover their deposit.

3. Appraisal Contingency

When a loan is involved, lenders require an appraisal to confirm the home’s value matches (or exceeds) the purchase price. An appraisal contingency protects the buyer if the property appraises for less than the agreed price. In that case, the buyer can negotiate, pay the difference, or walk away.

4. Title Contingency

A title search verifies that the seller has clear ownership of the property and the legal right to sell. A title contingency protects the buyer if liens, boundary disputes, or other ownership issues are discovered. Knowing the details is important, and the title company will do a title search before offering Title Insurance, which lenders will typically require.

5. Sale of Buyer’s Property Contingency

Less common in competitive markets, this contingency allows the buyer to make their purchase dependent on selling their current home. While it can provide security for the buyer, many sellers prefer cleaner offers without this condition.

Why Contingencies Matter

For buyers, contingencies are safeguards that make a huge financial decision less risky. For sellers, understanding contingencies helps you evaluate the strength of an offer and anticipate potential roadblocks.

In the Bay Area, where the market can move quickly, contingencies often become a point of negotiation. Some buyers waive certain contingencies to make their offer more competitive, but that comes with risks that should be carefully weighed.

✅ Bottom Line:

The most common contingencies you’ll see are inspection, financing, appraisal, and title. Each plays a role in balancing protection with flexibility during the escrow process. If you’re writing or reviewing an offer, work closely with your real estate agent to understand which contingencies make sense for your situation and which might put your offer in the strongest position.

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