Real estate glossary
Contingency
A condition in the contract that must be met — or removed — by a deadline, letting the buyer cancel if it is not satisfied.
A contingency is an "if" in the contract. The most common ones let a buyer cancel and usually get their deposit back if the home fails inspection, does not appraise for the price, or the buyer cannot get their loan.
Each contingency has a deadline, often counted in days after acceptance. Before that deadline the buyer either removes the contingency in writing or cancels. Once a contingency is removed, the buyer can no longer use that reason to back out.
What it means for you as a seller
Until contingencies are removed, your sale is not certain. Tracking each contingency deadline tells you when your deal becomes much more secure.
Related terms
- Inspection contingencyThe buyer's right to inspect the home within a set period and cancel or ask for repairs if they are not satisfied with what they find.
- Appraisal contingencyLets the buyer cancel or renegotiate if the home appraises for less than the agreed price.
- Loan contingencyLets the buyer cancel if they cannot get the mortgage described in the contract by the deadline.
- Contingency removalThe buyer's written confirmation that they are giving up a contingency, which usually puts their deposit more at risk if they later back out.
Not legal or tax advice. These explanations are general information to help you follow your own transaction. Laws, forms and customs vary by state and county, and the terms of your own contract always control. For advice about your situation, talk to your real estate agent, a real estate attorney or a tax professional. Last updated .