What Is a Contingency in a Home Purchase? A Condition That Lets You Exit the Deal, and Three of Them Protect Most Buyers

A contingency is a condition written into the purchase contract. If it isn't satisfied by its deadline, the protected party can usually terminate, and a buyer who terminates properly generally gets the earnest money back. Miss the deadline, and the protection usually goes away. Here's how the main ones work in the standard Central Ohio contract, the Columbus REALTORS®/Columbus Bar Association purchase contract.

Financing. Your purchase depends on getting the loan. The standard form sets deadlines for a lender pre-qualification letter, a loan application, and an optional loan commitment date. If your lender tells you in writing that it can't provide the financing, you have a short window to deliver that notice to the seller and terminate (three calendar days on the standard form).

Appraisal. The contract either is or is not contingent on the home appraising at or above the purchase price; a box gets checked one way or the other. If it is contingent and the appraisal comes in low, the buyer has five calendar days after receiving the appraisal to terminate in writing, and the parties can use that window to renegotiate.

Inspection. You get a Specified Inspection Period, a negotiated number of days, to complete inspections and tests. Then you can request repairs through the Agreement to Remedy Period or terminate. Two details buyers often miss: the standard form allows termination only for material defects (conditions affecting health, safety, habitability, use, or value), not routine maintenance or cosmetic items. And if you don't complete an inspection within the period, that contingency is treated as waived.

Others worth knowing. Attorney approval (a few days for either side's attorney to review, if the parties fill it in), condo or HOA document review, title review if the title commitment shows a problem, and sometimes a contingency on the sale of the buyer's current home.

Which ones matter most? For most financed buyers, financing, appraisal, and inspection carry the weight. Waiving any of them to win a house is a real risk trade, and it deserves a real conversation before you sign.

The deadline rule. Nearly every contingency runs on calendar days and requires written notice. The contract says time is of the essence, which means late is too late. Put every date on your calendar the day your offer is accepted.

Legal questions about contract language belong with a real estate attorney.

Getting ready to write offers? Let's walk through the contract together before it matters. Grab a time at cal.com/norbysellsohio/schedule.

Norby Fischer | Epique Realty | 614-230-1117 | norbyfischer@epique.me