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  • Writer's pictureDamon H

Understanding Contingencies In The Real Estate Selling Process

Contingency Plan

What are Contingencies in Real Estate terms?

Contingencies are conditions that must be met before a real estate transaction can be finalized. They are designed to protect both the buyer and the seller from unforeseen circumstances that could affect the deal. Contingencies can cover various aspects of the transaction, such as financing, appraisal, inspection, title, and more.

Contingencies can have a significant impact on the selling process in real estate. They can affect the timeline, the negotiation, and the outcome of the deal. Here are some ways that contingencies can influence the selling process:


Contingencies usually have a specified time frame for completion. For example, a financing contingency may require the buyer to obtain a mortgage approval within 30 days of the contract date. If the contingency is not met within the time frame, either party can cancel the contract without penalty. Therefore, contingencies can extend or shorten the selling process depending on how quickly they are resolved.


Contingencies can also affect the negotiation between the buyer and the seller. For example, an inspection contingency may allow the buyer to request repairs or a price reduction based on the findings of a home inspection. The seller can either agree to the request, counteroffer, or reject it. Therefore, contingencies can create opportunities or challenges for negotiation depending on how reasonable and flexible both parties are.


Contingencies can also affect the outcome of the deal. For example, an appraisal contingency may require the property to appraise at or above the contract price. If the appraisal comes in lower than the contract price, the buyer can either walk away from the deal, renegotiate with the seller, or make up the difference in cash. Therefore, contingencies can increase or decrease the likelihood of closing depending on how favorable and realistic they are.

As a seller, it is important to understand the role of contingencies in the selling process in real estate. Contingencies can be beneficial or detrimental depending on how they are handled and resolved. By being aware of the potential risks and rewards of contingencies, you can make informed decisions and prepare for any possible scenarios that may arise during the transaction.

Keep it Foxy,

"Mr Foxy"

Damon H

Sales Manager & Founder

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