In Real Estate, contingency means a condition of the agreement of sale which needs to occur for the transaction to keep moving forward. For a Buyer, there are various types of contingencies; Inspection contingency, Financing contingency, Appraisal contingency, Title contingency, Home Sale contingency.
Inspection Contingency: While buying a home we inspect the house. It allows us to know the real condition of the house. Although Inspection is the most common contingency, it involves more than just the state of the house, it also includes checking for mold and termites, etc. If after inspecting the house the customer feels that the property is not suitable or it will require too much work after the purchase he/ she can choose to walk out from the deal. This is one type of contingency.
Financial Contingency: It is the second type of contingency.
This contingency come into play when you want time to apply and get loan to buy a home. According to this contingency if you are unable to get financing by the company who is providing the loan facility for that particular house, then you have the option to look for alternate sources or back out of the sale.
