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Nerdy takeaways
- Including contingencies in your offer can protect your earnest money.
- Contingencies are becoming more common as the housing market continues to cool.
- The proper walk-away clause can prevent unexpected repair costs, financing issues and appraisal gaps.
You found a house that fits your budget and wish list, and now it's time to make an offer.
But questions remain. Is the property really worth the asking price? Are there hidden structural problems? Will your home loan application win final approval? Steps during the mortgage process — including an appraisal, a home inspection and underwriting — will provide answers, but in the meantime, you can include contingencies in your offer.
Making a contingent offer on a home
A purchase contract is legally binding, and breaking one can be costly. Making a contingent offer protects your interests in case unexpected issues mean you no longer can or want to buy the home. A contingent offer includes "walk-away" clauses, or "contingencies," that let you get out of the deal and retrieve your earnest money deposit if certain conditions aren't met.
Think of a contingency as an “if-then” proposition. For example: If the appraised value of the property is lower than the purchase price, then I can ask for a lower price or get out of the contract.
» MORE: Tips for first-time home buyers
When working with your agent to write the offer, you'll have to decide which contingencies to include. Your real estate agent can explain your options and make recommendations.
Although real estate contingencies protect your interests, be aware that too many stipulations in the contract can reduce the likelihood of the seller accepting your offer, especially in a tight market.
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Types of real estate contingencies
Here are some examples of contingencies that can be included in home purchase agreements.
Inspection contingency
A home inspection contingency lets you negotiate the sales price, ask for repairs or walk away from the sale based on the inspection results.
Your contract may stipulate that repairs must be made if problems are uncovered, but that can lead to closing delays while the fixes are scheduled and approved. You may prefer to renegotiate the sale price if significant improvements are needed.
During the highly competitive market of 2022, many buyers waived inspection contingencies to make their offers more attractive to sellers. According to the National Association of Realtors’ (NAR) Realtors Confidence Index, 30% of buyers skipped home inspections entirely at its peak in June 2022. As of January 2026, that number has dropped to around 12%, showing that buyers are no longer under as much pressure to give up important protections when purchasing a home.
🤓 Nerdy Tip
Sales contracts may also be written with “a right to void.” This means the buyer won’t require repairs suggested by the home inspection report but can cancel the sale without penalty. In hot markets, buyers may feel pressure to forgo home inspections to win bidding wars. But this is risky, and there are other ways to strengthen an offer, such as being flexible on the closing date. A seller, for instance, may want additional time to move out.
Mortgage contingency
Unless you're buying a home with cash, this contingency is necessary even if you’re preapproved for a mortgage. Preapproval is important, but it's not an absolute guarantee. After a home is under contract, your loan still must go through a final stage of underwriting. If your financing falls through, a mortgage contingency gives you a legal out from the purchase contract.
Appraisal contingency
When a home appraises for less than the offer amount, your financing may fall through, or you may have to put more money down to buy the property. A property appraisal contingency lets you back out if the appraisal comes in lower than a certain amount.
Similar to the increase in inspection contingencies, the NAR’s Realtors Confidence Index also reported a rise in the use of appraisal contingencies. In June of 2022, 32% of buyers waived appraisal contingencies compared to just 15% as of January 2026.
Home sale contingency
Under a home sale contingency, your offer is subject to the successful sale of your current house. The contingency is most often based on a specific time period — such as 30 or 60 days — after which the contract is forfeited. You're off the hook for buying the home, and the seller can entertain other offers.
Including a home sale contingency in a seller's market puts your offer at a disadvantage. With lots of buyers competing for a limited number of homes, sellers are likely to favor offers without this condition because they ensure a faster, more certain path to closing.
Other contingencies
There may be additional conditions you want to include in an agreement. Other standard contingencies can include:
| Contingency | Description |
|---|---|
| Title contingency | A report showing clear title to the home and the definition of a reasonable time period to close the sale. |
| Homeowners association (HOA) contingency | Allows a buyer to review HOA's governing documents, financials and rules before finalizing a home purchase. |
| Homeowners insurance contingency | Allows the buyer to back out of the deal if they cannot get homeowners insurance for the property. |
| Rent-back clause | Allows the seller to continue living in the home after closing for a specified period of time, giving them time to look for a new home and move out. During this time, the buyer collects rent payments from the seller. |
| Termite certification | Confirms that the home was checked for termites and meets the required pest inspection standards. |
Real estate contingency deadlines
Each contingency has an associated deadline. For example, a home inspection contingency would state a time frame for the inspection to take place and give the buyer a certain number of days to ask the seller to make repairs or lower the sales price.
Keep track of contingency deadlines so nothing sneaks up on you — and so you won’t miss an important date to enforce a condition the seller must meet. Having a calendar with all deadlines listed, perhaps even with pre-deadline notices a few days ahead, will help you stay on top of critical contingencies.
Throughout this process, you’ll want your agent to guide you; in more complicated cases, you may even want the advice of a real estate attorney. It’s easy to get tripped up by legal jargon, and sometimes what’s not in writing does the most damage.
NerdWallet writer Isabella Angelos contributed to this story.
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