Understanding Real Estate Contingencies (For Buyers and Sellers)

When a buyer submits an offer on a home, the purchase agreement often includes certain conditions known as contingencies.

These contingencies protect both the buyer and the seller during the transaction.

Across markets like Plymouth, Northville, Novi, Canton, and Brighton, most purchase agreements include several standard contingencies.

Inspection Contingency

An inspection contingency allows the buyer to conduct a professional inspection of the property.

If significant issues are discovered, the buyer may request repairs, negotiate credits, or in some cases withdraw from the agreement.

Financing Contingency

This contingency protects the buyer if they are unable to obtain financing.

If the buyer’s loan cannot be approved within the contingency period, they may be able to exit the agreement.

Appraisal Contingency

An appraisal contingency ensures that the property value supports the purchase price.

If the appraisal comes in lower than expected, buyers and sellers may renegotiate terms.

Home Sale Contingency

Some buyers include a contingency that allows them to purchase the new home only if their current home sells first.

These contingencies can make offers less attractive in competitive markets.

Why Contingencies Matter

Contingencies help balance risk between buyers and sellers.

They also define how problems are handled if unexpected issues arise during the transaction.

Final Thoughts

Understanding contingencies helps both buyers and sellers evaluate offers more clearly.

The specific terms of each contingency can significantly affect how a transaction unfolds.

The Jason Matt Team helps buyers and sellers throughout Plymouth, Northville, Novi, Canton, Brighton, Livonia and surrounding Metro Detroit communities.