How to Handle Contingencies in a Real Estate Contract as a First-Time Seller

23 October 2025

Selling your home for the first time? It’s exciting—and let’s be real, kinda terrifying too. With all the paperwork, legal jargon, and back-and-forth negotiations, real estate contracts can feel like a foreign language. And smack dab in the middle of all that? Contingencies. Yep, those little “if this, then that” clauses that can make or break a deal.

If you’re scratching your head trying to figure out what contingencies even are, or how to deal with them like a pro, you’re in the right place. Let’s peel back the curtain and walk through everything you need to know about handling contingencies in a real estate contract as a first-time home seller.

What Exactly Are Contingencies?

Let’s start with the basics. A contingency in a real estate contract is a condition that must be met for the sale to go through. Think of it like a safety net—for the buyer, mainly.

In simple terms? These are the “get out of jail free” cards buyers can play if certain things don’t line up. If those conditions aren’t met, the buyer can walk away from the deal, typically without losing their earnest money (a.k.a. their deposit).

That’s why, as a seller, you need to keep a sharp eye on every contingency in your contract—they can totally change the game for you.

Why Contingencies Matter to You as a Seller

You might be thinking, “I’m the one selling! Why should I stress about the buyer’s conditions?”

Here’s the thing: if a deal falls through because of a contingency, you’re back at square one. That means more showings, more waiting, and more of your life on pause. Not cool.

Plus, the longer your home sits on the market, the more buyers start to wonder if something’s wrong. So yeah… contingencies are a big deal.

The good news? With the right strategy, you can protect yourself and keep the process running smoothly.

Common Real Estate Contingencies You’ll Face

Let’s break down the most common contingencies you’re likely to encounter. Knowing what to expect is half the battle.

1. Home Inspection Contingency

This one’s basically a given. It lets the buyer hire a home inspector to look for problems—like leaky roofs, mold, or a haunted attic (okay, maybe not that last one).

🚨 The Catch: If the inspector finds issues, the buyer can ask you to fix them, lower the price, or even back out.

🛠️ Seller Tip: Get a pre-listing inspection. That way, you spot (and fix) problems before the buyer’s inspector does.

2. Financing Contingency

This gives the buyer time to secure a mortgage. If they don’t get approved, they can walk away.

💸 The Catch: Even pre-approved buyers can get denied last-minute if something changes—like a job loss or credit score drop.

💡 Seller Tip: Prioritize buyers with strong financing. Ask for mortgage pre-approval letters with offers.

3. Appraisal Contingency

The lender wants to make sure the home’s worth the loan amount. So they send an appraiser to check the value.

📉 The Catch: If the appraisal comes in low, the buyer can ask you to lower the price—or bail.

📌 Seller Tip: Price your home right. Overpricing can lead to low appraisals and broken deals.

4. Home Sale Contingency

Some buyers need to sell their current home before buying yours. This contingency gives them time to do that.

⏳ The Catch: You’re stuck waiting, and their sale might fall through.

⛔ Seller Tip: Be cautious. You might want to avoid accepting offers with this contingency unless the buyer’s home is already under contract.

How to Review Offers with Contingencies

Alright, so offers are rolling in (woohoo!). Before getting too hyped, slow down and look closely at the contingencies.

Here’s how to review them with a critical eye:

1. Look Beyond the Price

A high offer isn’t always the best offer. A slightly lower offer with fewer contingencies might be safer and faster. Think long-term.

2. Evaluate Each Contingency Individually

- How likely is it to be triggered?
- What’s the timeline?
- Can it be negotiated or removed?

Don’t be afraid to push back on anything that feels too risky or vague.

3. Set Clear Deadlines

Contingencies shouldn’t drag on forever. Your contract should have firm timelines for inspections, financing, and appraisals. The faster these boxes are checked, the less stress you’ll have.

Negotiating Contingencies Like a Pro

You don’t have to accept everything as-is. In fact, you shouldn’t.

Here are a few moves that can give you the upper hand:

Counter Contingencies

See a home sale contingency? Counter it by saying you’ll accept only if their current home is already in contract.

Want to avoid footing the bill for repairs after an inspection? Offer a repair credit instead of handling the fixes yourself. It puts the ball in the buyer’s court.

Ask for Shorter Contingency Periods

Short inspection or financing windows keep things moving. A 7-day inspection period? Way better than 21 days of nail-biting suspense.

Request More Earnest Money

A higher deposit means buyers have more to lose—so they’re less likely to walk away casually. It shows they’re serious.

What Happens If a Contingency is Triggered?

Let’s say the inspection comes back with issues or the appraisal is low. What now?

Well, you’ve got a few options:

1. Renegotiate

Talk it out. Maybe you lower the price, agree to fix something, or split the cost with the buyer.

2. Cancel the Contract

If a contingency gives the buyer the right to walk and they exercise it, the deal’s off. You’ll usually have to refund their earnest money.

Yeah, it stinks—but better to cut losses early than get stuck in limbo.

3. Hold Firm

If the buyer asks for something outrageous—like installing a pool or replacing all appliances—you can say no. Just know they might walk.

How to Protect Yourself as a First-Time Seller

Here’s how to stay one step ahead in the contingency game:

Work with a Great Real Estate Agent

A seasoned agent knows all the ins and outs. They’ll help you sort through offers, set timelines, and negotiate like a boss.

Read (and Understand) the Contract

Yes, it’s legalese. Yes, it’s boring. Yes, you still need to understand what you’re signing. Ask questions. Don’t just nod and sign.

Keep Emotions in Check

It’s your home, your memories—but it’s also a business transaction. Try not to take things personally and focus on your end goal.

Have a Backup Plan

Deals can fall through. It sucks, but it’s reality. Stay flexible and have a plan B, whether it’s relisting or talking to the next best buyer.

Bonus Tip: Consider Contingency Waivers

In hot markets, some buyers waive contingencies to make their offer stand out. That’s great news for you—less risk, fewer headaches.

But proceed with caution. Waiving contingencies can fast-track things, but it might also open up post-closing drama if the buyer has regrets.

Final Thoughts: You’ve Got This!

Okay, whew. That was a lot. But now you know exactly how to handle contingencies in a real estate contract as a first-time seller.

To sum it all up: Know what contingencies are, evaluate them carefully, negotiate when needed, and always protect your interests. With the right mindset and a great support team, you’ll navigate this process like a pro—even if it’s your first time.

Selling a home isn’t just about finding a buyer. It’s about finding the right buyer with the right terms. So go on—be picky, be prepared, and don’t be afraid to push back.

Here’s to smooth closings and stress-free sales!