Financing Contingencies and Clauses for 'For Sale' Deals

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Contingencies protect buyers from unforeseen problems. The common types include financing contingencies (if your loan falls through), inspection contingencies (allowing negotiation or exit if significant defects are found), and appraisal contingencies (protecting you if the property appraises for less than the agreed price).

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Understand each contingency’s timeline and how waiving them affects leverage. In hot markets buyers sometimes waive contingencies to be competitive, but that increases risk. If you waive an inspection or appraisal contingency, budget extra for potential repairs or out-of-pocket financing costs.

Negotiate contingency language with care. Shortening contingency periods can make offers stronger without entirely removing protections. Work closely with a knowledgeable agent or attorney to craft contingency terms that balance competitiveness and safety.