Contingencies must be met before a real estate contract becomes legally binding. If these conditions aren’t met within a specified time frame, you can cancel your offer, and you are entitled to a refund of your Earnest Money Deposit or "EMD".  Once both parties come to an agreement, and there are no further changes to the contract, it will be ratified. All contingency deadlines start the day of ratification.
 
Most common contingencies are:
 
  • Inspection contingency: The inspection contingency allows the purchaser an opportunity to have a home inspection and request repairs or credits. The most typical inspection is a “general home inspection,” but could also include radon, well, septic, pool, chimney, etc. If blemishes appear on the inspection report (very common), this contingency gives the buyer has the opportunity to negotiate repair(s) or negotiate a credit. If no agreement is reached, the buyer has the option to void the contract within the inspection contingency period. Generally, 7-10 days is sufficient to complete inspections. 
  • Appraisal contingency: Ordered by your lender, the appraisal contingency states that the home must appraise for at least the sales price. If the appraisal comes back for less than the sales price, the appraisal contingency allows the buyer the right to request a lower sales price. If the seller declines, this contingency permits the buyer to void the contract. Generally appraisals take at least 21 days.
  • Finance contingency: The finance contingency state the deal is contingent on the buyer being able to secure financing, which is a loan commitment from a lender (not the actual funds). Generally, finance contingencies are 7-21 days; the shorter the time, the stronger the offer.
     
 
 

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Khalil El-Ghoul

"Thanks for reading! I’m passionate about empowering home buyers and sellers with professional advice and unbiased information, throughout the real estate transaction. Unlike most agents, I always put clients first. When it comes to negotiating, marketing homes, and sealing the deal, I’ve got the experience and knowledge you’re looking for. If you have any questions about moving to VA, D.C., or MD, don’t hesitate to reach out."