Contingencies Every Buyer Should Understand

What Are Contingencies in Real Estate?

When you make an offer on a home, contingencies are conditions that must be met before the sale can close. Think of them as your safety nets — they protect you from being locked into a purchase if something unexpected comes up. In Massachusetts, understanding contingencies is especially important because we're an attorney review state, which adds another layer of protection for buyers.

Here's a breakdown of the most common contingencies you'll encounter when buying a home in Greater Boston.

Home Inspection Contingency

This is one of the most important protections a buyer can have. The inspection contingency gives you the right to have the property professionally inspected and to negotiate repairs or walk away if significant issues are found.

• Typically allows 7-10 days for the inspection to be completed

• Covers structural issues, electrical, plumbing, HVAC, roof condition, and more

• In Massachusetts, a home inspection is separate from the municipal inspection required at closing

• Your inspector may recommend specialists (radon, pest, chimney) for further evaluation

A well-written offer can include an inspection contingency with reasonable terms that still keeps you competitive.

Financing Contingency

The financing (or mortgage) contingency protects you if your loan falls through. It ensures you won't be obligated to buy the home if your lender ultimately denies your mortgage application.

• Gives you a set number of days to secure final loan approval

• Protects your earnest money deposit if financing doesn't come together

• Getting pre-approved before making an offer strengthens your position significantly

• In hot markets, some buyers waive this contingency — but only if they have backup funds or are very confident in their approval

Appraisal Contingency

Your lender will order an appraisal to confirm the home is worth what you've agreed to pay. The appraisal contingency protects you if the appraised value comes in lower than your offer price.

• If the appraisal is low, you can renegotiate the price, make up the difference in cash, or walk away

• This contingency is especially relevant in competitive markets where bidding wars push prices above recent comparable sales

• Some buyers include an "appraisal gap" clause, offering to cover a certain dollar amount above the appraised value

Title Contingency

The title contingency ensures the property has a clear title — meaning there are no liens, disputes, or legal issues that could affect your ownership.

• A title search is conducted by the closing attorney in Massachusetts

• Issues like unpaid taxes, contractor liens, or boundary disputes can cloud a title

• Title insurance protects you from claims that arise after closing

• This contingency is standard and rarely waived

Home Sale Contingency

If you need to sell your current home before you can buy a new one, a home sale contingency makes your offer conditional on that sale closing.

• Gives you a set period to sell your existing property

• Sellers may accept a "kick-out" clause, allowing them to keep the home on the market and give you a deadline to remove the contingency if another offer comes in

• In competitive markets, this contingency makes your offer less attractive — consider bridge financing or selling first if possible

When Does Waiving Contingencies Make Sense?

In Greater Boston's competitive market, buyers sometimes waive contingencies to strengthen their offers. This can work in your favor, but it comes with real risk:

• Waiving inspection: No longer legal in Massachusetts.

• Waiving financing: Only advisable if you have cash reserves to cover the purchase if your loan falls through.

• Waiving appraisal: Be prepared to bring extra cash to closing if the home doesn't appraise at your offer price.

The key is understanding the tradeoffs. A good buyer's agent will help you craft a competitive offer that protects your interests while still standing out to sellers.

Massachusetts Is an Attorney Review State

One important note for buyers in our market: Massachusetts requires an attorney to handle the closing. Your real estate attorney reviews the purchase and sale agreement, handles the title search, and represents your interests throughout the transaction. This provides an additional layer of protection beyond your contingencies.

Understanding contingencies helps you make smarter, more confident decisions. Whether you're a first-time buyer or a seasoned homeowner, knowing your options is the first step to a successful purchase.