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Most common real estate contingencies that home sellers need to know

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The moment you put your Palm Beach County home up for sale, it won’t take long before you start getting offers for it, considering its high value as prime property. In these offers, you are most likely to read about contingencies.

What exactly are contingencies?

In real estate, a “contingency” is a clause or condition in an agreement of sale. These contingencies must be met; otherwise, you may not be able to close the deal on your home sale.

The most common involve inspections, appraisals, financing, and titles.

This article will tackle the nuances involving these common real estate contingencies so that you, the home seller, can better handle them as you go about with this particular real estate transaction.


An inspection contingency is a common clause that buyers add to their offers. It allows the home buyer to (1) renegotiate the offer when an inspector discovers a problem in the house; (2) ask you – the seller– to shoulder repairs; or (3) simply walk away from the sale.

To put this contingency in effect, the buyer gets an inspector to check the house for any flaws or structural problems, such as fire hazards, mold, or possible infestations. Once the inspector is finished, they send a report to the buyer showing details of the house’s condition. The inspector may also include solutions to problems they discovered.


A home’s fair market value depends a lot on the results of the appraisal. That’s why buyers tend to add an appraisal clause to their offer. If an appraisal comes in too low, financing becomes a struggle as the buyer’s lender may become hesitant to approve a mortgage.

For example, you and a buyer agreed on the price of $250,000 for your home. However, the appraisal comes back at only $200,000. That means the buyer’s lender will only agree to a $200,000 loan, which is less than the agreed price between you and the buyer.

In this situation, you can agree to lower the price tag on your home or the sale doesn’t proceed t all.


Most buyers can’t simply pay cash for a home so they take out a mortgage. A financing contingency provides the buyer with the time they need to get a loan.

It’s a common misconception among buyers that a loan pre-approval translates to guaranteed loan approval. In reality, the loan pre-approval is just the start of the lending process.

Once the loan pre-approval is settled, buyers must choose specific loan terms and complete the entire underwriting process, which is usually where the said buyers have a hard time. If the buyer can’t secure financing, the contingency gives them the time to look for other lenders or the chance to just walk away from the sale.


A title serves as the official record of a home’s ownership. It includes a list of those who owned the property from past to present, as well as any legal judgments or liens against the home.

During a home sale, a lawyer or a title company will review the title before the sale. They can identify any potential issues with ownership and resolve them before closing, so the title can be transferred barring any legal impediments to the new owner.

Should any problems arise that can’t be resolved by the end of the sale, a title contingency allows the buyer to walk away from the sale without having to deal with the unresolved issues of the title.

Get an experienced agent

When in doubt, an agent can help you make the best possible decisions at every stage of the selling process, including going through contingencies that buyers may have added to their offers. So, go for an agent with a keen eye for specifics and who can guarantee you a smooth and profitable home sale. Look at their track record and find out what previous clients have to say about the agent. Aside from professional qualifications, you’ll want to work with an agent whose way of doing things fits your personality.

When it comes to understanding how contingencies could affect the sale of your home in Palm Beach County, the Telchin Group, LLC can answer your questions. They can point you toward the best real estate in Ibis and the rest of Palm Beach County. Just call 561.301.0249 or send an email here.

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