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Contingencies & The Fine Print That Protects Your Biggest Investment
Dated: October 13 2025
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In my years as a realtor, I’ve seen firsthand how contingencies can make or break a real estate transaction. They’re often misunderstood or overlooked, but these clauses are the unsung heroes of every deal—providing essential protection for both buyers and sellers. Whether it’s a cash offer or a complex multi-property exchange, almost every contract includes some form of contingency. Even cash buyers typically include clauses for title review or verification of funds.
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One of the most common—and most important—contingencies is the home sale contingency. This is used when a buyer wants to purchase a new home but needs to sell their current one first. It’s ideal for clients who want to move “doorstep to doorstep” without owning two homes at once. But it’s not without complexity. These offers often include a “first right of refusal” clause, which allows the seller to accept another offer if the original buyer can’t remove their home sale condition within a set timeframe—usually 24 to 72 hours. It creates a domino effect, where one transaction depends entirely on the successful completion of another. That’s why clear communication and coordination between all parties—buyers, sellers, agents, and lenders—is absolutely critical.
If there’s one contingency I never let my clients waive, it’s the home inspection. I often compare skipping an inspection to jumping out of an airplane without pulling the ripcord. Even brand-new construction can hide issues. I’ve seen blocked drains caused by hardened grout, missing insulation between garages and living spaces, and other problems that would never be visible to the average buyer. Professional inspectors are trained to catch everything—from a faulty foundation to a loose doorknob—and their insights can save you thousands down the line.
Financing contingencies are another layer of protection that buyers should never overlook. Even with a pre-approval letter, loans still have to pass through underwriting, and that’s where things can fall apart. I’ve had clients lose their dream home because they bought a car or opened a new credit card before closing. These actions can throw off debt-to-income ratios and derail final loan approval. With a financing contingency in place, buyers can walk away with their earnest money intact if something goes wrong. Insurance contingencies are also becoming more important as rates rise nationwide. A sudden spike in premiums can significantly affect monthly payments, and buyers need the flexibility to reassess if coverage becomes unaffordable.
Contingencies can also impact timelines. When one sale depends on another, closing dates become educated guesses rather than guarantees. This is especially tricky when properties are in different states or when multiple brokers are involved. During the peak of the seller’s market, contingent offers were often dismissed outright. But now, as the market shifts, they’re making a comeback. I always prepare my clients for both best- and worst-case scenarios, helping them understand the risks and rewards of contingent transactions.
Yes, contingencies can add complexity. They can stretch out timelines and require more coordination. But they exist for a reason: to protect everyone involved. Whether you’re buying your first home or selling your fifth, understanding how these clauses work—and which ones are most critical to your situation—can give you confidence and peace of mind. My job is to guide you through every step, making sure your transaction is as smooth and secure as possible from contract to closing.
Lori Thompson
As a Colorado Native, I loved growing up at the foot of Pikes Peak. Colorado Springs is an amazing community with hiking trails, parks and many community events. My husband and I enjoyed raising our c....
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