Articles and Advice
What Sellers Should Know About Buyer Contingencies
Accepting an offer on your home feels like a major milestone. But the journey from accepted offer to closing table is rarely a straight line. Buyer contingencies are a normal part of nearly every real estate transaction, and understanding them before you get to that stage can make the difference between a smooth sale and an unexpected setback.
What Is a Contingency?
A contingency is a condition that must be met before the sale can proceed. Buyers include them in purchase contracts to protect themselves from unforeseen issues. But as a seller, you need to understand what you're agreeing to when you accept an offer that contains them.
The Most Common Contingencies
Home Inspection
After an accepted offer, the buyer typically has a set number of days to have the property professionally inspected. If the inspector uncovers significant problems — structural concerns, roofing issues, outdated electrical systems — the buyer may request repairs, ask for a price reduction, or, in some cases, walk away entirely. How you respond to those findings can significantly affect whether the transaction closes.
Financing
Even pre-approved buyers can face challenges securing final financing, especially if interest rates change, their employment status shifts, or the property appraises below the agreed price. When an appraisal comes in low, you'll typically have a few options:
- Lower the price
- Negotiate a split with the buyer
- Stand firm and risk the deal falling through
Being aware of this possibility in advance helps you plan and respond with confidence.
Appraisal
Lenders won't approve a mortgage for more than the home's appraised value, which means if there's a gap between the appraised amount and the sale price, the deal can stall. In competitive markets, some buyers waive this contingency to strengthen their offer, but that's a decision that rests with them, not you.
Sale
Less common in fast-paced markets, a sale contingency means the buyer must sell their current home before they can purchase yours. This adds uncertainty to your timeline, so it's important to weigh whether the terms are worth the potential delay.
Title
A title contingency protects the buyer by confirming the property can be transferred free of liens, disputes, or ownership claims. Although these issues are typically handled behind the scenes by title companies and attorneys, any problems that arise can delay or even stop the closing process.
What You Can Do as a Seller
As a seller, you still have room to negotiate. You can:
- Set or adjust contingency deadlines
- Respond with specific repair terms rather than broad credits
- Decline certain contingencies, depending on your position in the market
Close coordination with your agent is essential. Each contingency follows its own timeline, and missing a deadline can lead to serious consequences.
The Bottom Line
The goal isn't to avoid contingencies. It's to understand what each one means for your sale so you can make informed decisions at every step.
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