Contingencies in the homebuying process refer to what?

Contingencies in the homebuying process are conditions that must be satisfied before the transaction can be finalized and the closing can occur. They serve as protections for the buyer (and sometimes the seller), ensuring that certain criteria are met before proceeding with the purchase. Common examples of contingencies include a home inspection contingency, which allows the buyer to have the home inspected and request repairs or reconsider the purchase if significant issues are found, and a financing contingency that ensures the buyer secures a mortgage under specific terms.

When these conditions are met, the sale can proceed as planned. If not, the buyer may have the right to withdraw from the contract without penalty, safeguarding their interests. Understanding contingencies is critical for buyers to protect themselves in the purchase process while allowing for informed decision-making.