When you make an offer on a property, you can set conditions that must be met in order to obligate you to carry through with the offer.  For instance, it may be a condition that you must be approved for a mortgage, and if you aren’t, you will be released from the contract to purchase.  Or, perhaps, you are willing to buy the property only if the seller will repaint the pink walls in the Barbie Doll-themed bedroom.


These conditions are also called contingencies.


Technically, you can make almost anything a contingency.  That’s not to say the sellers would necessarily agree to it, but you can request whatever you’d like.


The most common contingency is approval for financing.  Without financing, the average person can’t purchase a home, so you would not want to be obligated to do so if your lender turned down your loan application.


Another is a sale contingency.  This is used when a buyer needs to sell his current home before closing on the next purchase.


Some buyers identify an issue(s) with the house that will be a deal breaker if the seller won’t address it/them before closing.  In these cases, the buyer doesn’t want to pay for a loan application and inspections and THEN find out the seller won’t address a problem that was obvious from the beginning.


For instance, let’s say the window frames are rotted on one side of the house.  Other than being wary of that problem, the buyer loves the house.  However, she won’t have the time or money to deal with rotted window frames, if she purchases the property.  So, while most repair requests are made after inspections have been completed, there are some instances when the buyer will identify “must do” repairs when making the offer and will require those repairs be completed as a contingency of the offer.


Contingencies generally protect the buyer and provide an “out” when certain circumstances aren’t met.


However, contingencies can cause the seller to reject the offer.


Imagine you are a seller and you have two offers in front of you.  Let’s say one of the offers has a sale contingency, allowing the buyer to walk away from the deal if his home doesn’t sell.  The other one doesn’t have a similar requirement.  Assuming all the other terms were the same, which offer would you accept?


Similarly, suppose your offer has a contingency that says you must qualify for a loan or you can terminate the contract.  Another buyer is making a cash offer.  Which offer would you take?


Generally, you have a better chance of a seller accepting your offer with contingencies if the market is a bit slow or the house has been on the market for a while.  In a hot market, where there are likely to be multiple offers on a house, a contingency could make your offer much less attractive than the others and cause you to lose out on the home. In either case, an experienced buyer’s agent can help you weigh the pros and cons keeping your offer clean or adding needed contingencies.  For help finding one, fill in the form on this page.