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5 Must-Have Contingencies When Making an Offer on a Home

5 Must-Consider Contingencies JPG_page-0001
Buying a home is one of the biggest financial decisions you’ll ever make. But what happens if something goes wrong? Without the right contingencies in your real estate contract, you could end up stuck with a home you can’t afford, costly repairs, or an unexpected financial nightmare. That’s why it’s essential to include these five key contingencies when making an offer.
  1. Home Inspection Contingency
A home might look perfect at first glance, but what about hidden problems—like structural issues, a failing roof, or an outdated electrical system? A home inspection contingency allows you to walk away or negotiate repairs if the inspection uncovers significant defects. This protects you from buying a home with costly surprises. Pro Tip: Even if the seller won’t negotiate repairs, knowing what you’re getting into can help you budget for future costs.
  1. Financing Contingency
Unless you’re buying a home with cash, you’ll need financing. But what if your mortgage application is denied? A financing contingency gives you a way out if you can’t secure a loan within a specified timeframe. This ensures you’re not legally bound to buy a home if your financing falls through. Pro Tip: Even if you’re pre-approved, unexpected changes—like a job loss or a lender’s stricter loan criteria—can derail a mortgage. A financing contingency protects you from those risks.
  1. Appraisal Contingency
Your lender will order an appraisal to determine the home’s fair market value. If the appraisal comes in lower than your offer price, your mortgage lender may not approve the full loan amount. An appraisal contingency allows you to renegotiate the price, cover the difference, or back out of the deal if the home doesn’t appraise at the expected value. Pro Tip: In competitive markets, buyers sometimes waive the appraisal contingency to make their offer more attractive. If you’re considering this, talk to a real estate attorney first to understand the risks.
  1. Home Sale Contingency
If you already own a home and need to sell it before buying, a home sale contingency ensures you’re not financially overextended. This contingency allows you to back out of the contract if your current home doesn’t sell within a specified timeframe. Without it, you could be stuck paying two mortgages at once. Pro Tip: If you’re in a seller’s market, including a home sale contingency might make your offer less competitive. Talk to your agent about strategies to strengthen your offer while protecting yourself.
  1. Radon and Environmental Hazard Contingency
Radon, lead paint, mold, asbestos, or contaminated soil can pose serious health risks—and some environmental hazards can be costly to fix. A radon and environmental hazard contingency allows you to test the home for potential dangers and back out or negotiate remediation if necessary. Pro Tip: In older homes, be especially cautious about lead paint and asbestos, which may require expensive abatement. Why Contingencies Matter Without these contingencies, you could be legally obligated to buy a home that’s unsafe, overvalued, or unaffordable. Contingencies protect you from financial loss and give you an exit strategy if something unexpected happens. Need a Professional Review of Your Offer? Real estate contracts are legally binding agreements—and missing just one key detail can cost you thousands of dollars. Before you sign, make sure your contract actually protects you. For the rest of 2025, at Cote Law Group, we offer a complimentary review of real estate offers to help buyers make informed, legally sound decisions. 📞 Contact us today for your free offer review.
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