<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1636887349932403&amp;ev=PageView&amp;noscript=1">

Real Estate Contingencies You Should Include in a Purchase Offer

Posted by Victoria Deubler

Find me on:

Jan 12, 2016 8:30:00 AM

In today’s abridged Agent Insights post, Kyle Hiscock - a Top Rochester Real Estate Agent - highlights important real estate contingencies to remember when representing buyers during closings. 

Here's Kyle: kyle-hiscock.jpg

Throughout the home buying process there are several decisions that a homebuyer must make. Determining how much to offer for a home, whether or not to ask for seller concessions, and when your buyer would ideally like to close on their new home are just a handful.

Another decision that will need to be made during the home buying process is which home buying contingencies to include in a purchase offer.

There are an abundance of real estate contract contingencies to choose from to help protect your buyers interests, so it’s extremely important to know which home buying contingencies to include in a purchase offer.


Consider including these real estate contingencies in a purchase offer:


Attorney Approval Contingency

One home buying contract contingency that you will have to decide is whether or not your offer will be contingent on an attorney’s approval. Since buying a home is such a huge investment and can be quite complex, purchasing a home without having an attorney’s representation is never suggested. 

It’s highly recommended that a buyer selects an attorney who practices real estate. Hiring an attorney who doesn't can create a ton of issues.  Real estate attorneys are well versed in protecting their client's interests and know how to solve issues that may arise during a real estate transaction.

Inspection Contingencies

There are lots of reasons to have a home inspection when buying a home.  Many home buyers believe that a home inspection is the only contingency that they can have included in their purchase offer. There are actually many inspection contingencies that can be included in a purchase offer, like:

  • Home Inspection
  • Radon Test
  • Pest Inspection
  • Septic Inspection
  • Well Water Test
  • Chimney Inspection
  • Foundation & Structural Inspection
  • Mold Inspection

Mortgage Contingency

If a buyer is purchasing a home with the assistance of a mortgage, this contingency is a must - for several reasons. Having a mortgage contingency in a purchase offer protects your buyer, should there be an issue with getting approval. A mortgage contingency should state that if a buyer cannot obtain financing that they will be given their earnest money deposit back.

Another important reason to include a mortgage contingency is that it spells out what type of mortgage a buyer is obtaining, what the loan-to-value percentage will be, and also creates deadlines in which the mortgage approval will be issued.

Earnest Money Deposit Contingency

An earnest money deposit, sometimes referred to as a good faith deposit, is made by a potential buyer who shows a homeowner they are serious about purchasing their home. The earnest money deposit contingency states that a buyer will submit the deposit within a specific amount of days or has already submitted the deposit.  

A great way for a buyer to help win in a multiple offer situation is to submit their earnest money deposit when their offer is submitted to a seller and also make sure the deposit is a substantial amount of money.  If able - a buyer who provides a strong earnest money deposit, typically at least 5% of the purchase price, usually has an advantage over other potential buyers.

Permits / Certificates of Compliance Contingencies

Another home buying contingency that buyers have to decide to include in their purchase offer or not relates to permits and certificates of compliance.  A buyer has the option to ask for permits for improvements made to a property, which can include:

  • Fences
  • Pools
  • Decks
  • Sheds
  • Building Additions
  • Basement Living Areas
  • Free Standing Fireplaces

It’s possible that a buyer will not ask for a permit for a fence that was built 50 years ago, however, it’s suggested that for large additions or improvements that a buyer asks a seller to provide the permits. It’s extremely important when making additions and major improvements to a home.

Home Sale & Transfer Of Title Contingency

Buying and selling a home at the same time can be very tricky. The home sale contingency allows a buyer to indicate if they’ve received and accepted an offer on their home and requires they inform a seller if the offer they’ve received is still contingent on the buyer's inspections, mortgage approval, or attorney approvals.

The transfer of title contingency states that the home a buyer purchasing is subject to their current residence transferring to the new buyers of the home. This contingency can be removed if a buyer is able to purchase a home without having to sell their existing home, which eliminates the need for a transfer of title contingency.

Homeowner Association Rules & Regulations Review Contingency

This contingency only applies to buyers who are purchasing property that is part of a homeowners association, AKA an HOA.  Buying a home that is part of an HOA, such as buying a condo, should always be contingent on the review and approval of the HOA rules and regulations.

Since being a part of an HOA has benefits as well as drawbacks, it’s important that a buyer knows exactly what they are signing up for. Every HOA is different and will have their own set of rules and regulations.


It’s important that your real estate buyers are protected through many of the above home buying contingencies because without them, they may open themselves up to avoidable risk.


Kyle has helped hundreds of buyers and sellers move in, out, and around the Greater Rochester area since 2011! Kyle actively writes helpful content on his popular, Rochester’s Real Estate Blog. If you’re thinking of moving to Rochester NY, contact Kyle to assist with your relocation needs.

To view the full version of this blog, visit: www.rochesterrealestateblog.com.

Interested in More Agent Insights?

Download Free Agent Insights eBook

Topics: Agent Insights

comments powered by Disqus

    The Homebuyer Guide + Packet Templates (2024)


    Use these 2024 Homebuyer templates to attract, educate & prepare homebuyer leads for their home search!

    Download the Templates

    Get New Articles in Your Inbox

    Recent Posts

    Follow Zurple

    Over 3,500 agents and brokers nationwide use Zurple software to close more deals.

    Brokerages that use Zurple