5 Contingencies You Should Never Remove When Buying a House

When navigating the intricate process of purchasing a home, buyers often come across the term "contingencies." These conditions must be met for the home-buying process to move forward. While there are several types of contingencies, some are too vital to forgo, ensuring you're making a wise investment and protecting yourself from future regrets. Here are the top five contingencies you should never remove when buying a house:

1. Mortgage Contingency:

A mortgage contingency is a condition embedded in the home purchase agreement. It states that the obligation of the buyer to finalize the purchase hinges on their ability to obtain a mortgage. If the buyer can't secure the loan, they aren't compelled to proceed with the purchase.

Popularity Among Buyer Contingencies

The mortgage contingency stands out as particularly common and recognized among the myriad contingencies that buyers might incorporate in their offer. It's often a fundamental element of most residential purchase agreements.

The Role of a "Safety Net"

In real estate, the term "safety net" is employed metaphorically when discussing mortgage contingency. Much like a safety net that prevents falls, this contingency offers a layer of financial protection for the buyer.

Protection of Earnest Money Deposit

Buyers usually provide an "earnest money" deposit upon making an offer for a home. This sum serves as a demonstration of their genuine intent to purchase. Should they retract their offer without a valid reason, this deposit is typically forfeited. 

2. Loan Contingency Removal

A common point of contention and potential confusion in the real estate buying process is the concept of loan contingency removal. At its core, it is not about the complete removal of the loan contingency but more about adhering to a stipulated timeline.

Understanding the Core Idea

It's All About Timing: Unlike what the name might suggest, loan contingency removal does not imply dismissing the significance of obtaining a loan. Instead, it sets a definitive deadline for securing the required financing.

Purpose of the Timeline: This provision is designed to keep the property transaction process moving forward. By establishing a clear-cut date, the buyer and seller have clarity regarding the transaction's progression.

The Importance of Clarity

Setting a Clear Date: It's imperative that buyers set a feasible date, keeping in mind the typical loan processing times and potential hurdles they might encounter.

Communication is Key: If there's any possibility of failing to meet this deadline due to delays in financing, the buyer should communicate with the seller on time. This not only maintains transparency but can also foster goodwill between both parties.

3. Contingency Removal Form Documentation:

It's not just about having contingencies but ensuring you've documented them appropriately. Using the contingency removal form helps track which conditions have been satisfied. This documentation is critical, as it provides clarity and protection for both buyer and seller. Remember, verbal agreements don't count; always have them in writing.

The Role of Contingency Removal Form

A Record-Keeping Tool: At its most basic, the contingency removal form is a document that helps parties involved keep a clear record of which conditions or contingencies have been met.

Clarifying Transactions: Often, real estate transactions involve multiple contingencies ranging from financing and inspections to appraisals. This form helps eliminate ambiguities, ensuring that both buyer and seller are on the same page.

Why Documentation is Imperative

Avoiding Misunderstandings: Real estate transactions can become convoluted. By documenting the status of each contingency, both parties reduce the risk of misunderstandings that could lead to disputes.

Legal Protection: Beyond clarity, this form provides legal evidence in case any disputes arise later. It's a testament to what has been agreed upon and what conditions have been satisfied.

The Pitfalls of Relying on Verbal Agreements

Lack of Tangibility: While verbal agreements might feel convenient and straightforward, they lack the tangibility of a documented agreement and can be easily forgotten or misconstrued.

No Legal Stand: In most jurisdictions, verbal agreements related to real estate transactions are not legally binding. Hence, in the event of a disagreement, they offer little to no protection.

4. Buyer Contingencies for Home Inspections:

A home might appear perfect on the surface, but hidden problems could be lurking beneath the facade. Structural issues, plumbing problems, or electrical glitches might not be immediately noticeable during an initial walk-through. By having a home inspection contingency, you reserve the right to renegotiate the price, request repairs, or even withdraw your offer without penalty if significant issues are uncovered.

Peeling Back the Layers: What Lies Beneath

Not Just Skin Deep: Even the most captivating homes, with their polished floors, freshly painted walls, and modern fixtures, can hide defects. Many issues, from foundational cracks to rusty pipelines, aren't immediately visible during a casual tour.

Potential Troubles: Among the concealed problems that homes may harbor are structural complications, outdated or faulty electrical systems, plumbing issues, or even pest infestations. Detecting these problems early can save buyers from costly repairs down the line.

5. Home of Choice Contingency:

Sometimes, sellers are also looking to move and buy a new property. The home of choice contingency ensures that the sale of their current home depends on them securing their next home of choice. As a buyer, being aware and including this contingency (if necessary and agreed upon) can provide flexibility and understanding to the seller, which can be beneficial in a competitive market.

Understanding the Home of Choice Contingency

Seller's Dual Role: Many sellers are transitioning to a new phase in their lives, often purchasing a new property. They desire to shift from their current home to the new one with minimal gaps in between.

A Binding Link: The home of choice contingency essentially links the sale of the seller's current property to the purchase of their next desired home. In other words, the finalized sale of the existing home hinges upon the seller securing their next residence.

Things to Consider

Duration: It's essential to specify the timeframe for the seller to find their next home, ensuring the buyer isn't left in limbo indefinitely.

Market Conditions: Understanding the current state of the real estate market is crucial. In a fast-paced market, properties might move quickly, but in slower markets, it could take longer for the seller to secure their next home.


What is the time to remove contingency?

  • Contingency timelines generally range from 10 to 30 days but can be adjusted based on negotiation. 

What does it mean to release a contingency?

  • You can decide to waive or release the contingency, which means that the deal will still go through without the condition being met. 

What is a 5% contingency?

  • Most construction projects use a rate of 5%-10% of the total budget to determine contingency. Typically that will cover any extra costs that might come up. 


While removing certain contingencies in a hot market might be tempting to make your offer more attractive, it's essential to weigh the risks and benefits. Some contingencies offer critical protections that shouldn't be dismissed lightly. It's always a good idea to consult with a real estate professional when deciding which contingencies to include and which (if any) to waive.

Mortgage Contingency

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