What Are Contingencies, and Why Do They Matter When Buying a Home?

If you’re planning to buy a home, you’ve probably heard the term “contingencies” come up. But what exactly are they, and why are they so important in the home-buying process?

In simple terms, contingencies are your safety net. They give you the opportunity to protect your investment while showing sellers you’re a serious and prepared buyer.

So, What Is a Contingency?

A contingency is a condition that must be met for your home purchase to move forward. If something doesn’t go according to plan—like the home doesn’t appraise at the agreed price, or major issues come up during inspections—contingencies give you the option to renegotiate or even walk away from the deal without losing your deposit.

What Are the Standard Contingency Periods in California?

In California, the default contingency periods are:

• Loan Contingency – 17 days

• Appraisal Contingency – 17 days

• Investigation/Inspection Contingency – 17 days

These timelines are negotiable. In a competitive market, buyers often shorten these periods (or in some cases, remove them) to make their offers more appealing to sellers. But it’s important to make sure this is the right move for you and your situation.

How Do You Shorten (or Remove) Contingencies?

With preparation!

• Get pre-approved—and ideally, fully underwritten—before you start house hunting.

• Understand your financials and comfort level with taking on certain risks.

• Have your Realtor (hi, that’s us!) guide you through the strategy that works best for you, based on the home and the competition.

Pro Tip: If you have a fully underwritten pre-approval from your lender, you may be able to remove your loan contingency upfront, which can make your offer significantly stronger.

Communication and Preparation Are Key

It all comes down to good communication and preparation before you submit an offer. We’ll help you understand when it’s safe to shorten contingency periods and when it’s better to give yourself more time for due diligence.

If you’re planning to buy a home and want to feel confident about contingencies and how to use them to your advantage, we’re here to help!

Schedule a virtual consultation through the link at the bottom of the page. Let’s get you home-ready!