When making an offer on a home in Raleigh, Cary, Apex, Holly Springs, or Fuquay Varina, price is just one part of the equation. The other terms of your agreement can be just as important as the sale price. As you and your REALTOR® craft your offer, it’s smart to discuss adding contingencies to your contract. Contingencies serve as a safety net, giving you the ability to exit the deal if certain steps in the process don’t go as planned.
How Do Contingencies Work in Real Estate?
Contingencies are conditions in a real estate contract that must be met for the sale to move forward. Some contingencies protect the buyer, and others protect the seller. If a contingency isn’t met, either party can walk away from the deal without penalties.
When your offer is accepted, you’ll typically pay an earnest money deposit (often 1% to 2% of the purchase price). This shows the seller that you’re serious about buying their home. If the sale closes, your earnest money is applied to your down payment and closing costs.
If you back out of the sale for a reason not covered by contingencies, you risk losing your earnest money. But if you withdraw because of a protected contingency, you can usually get it refunded.
Eight Types of Common Contingencies:
1. Home Inspection Contingency
This is one of the most common contingencies in Raleigh-area contracts. Any home—whether it’s in Cary, Apex, or Fuquay Varina—could have hidden issues. A home inspection contingency protects you in case the property is in worse condition than expected. It allows time to hire a licensed inspector, review the results, and decide whether to move forward, renegotiate, or back out if repair costs are too high.
2. Appraisal Contingency
If you’re financing your home purchase, your lender will require an appraisal to confirm the property’s value. If the home appraises for less than the purchase price, your loan may not be approved. An appraisal contingency protects you by allowing you to renegotiate the price or exit the deal while keeping your earnest money.
3. Financing Contingency
Even if you’re pre-approved for a mortgage, there’s no guarantee final financing will come through. A financing contingency ensures you can walk away with your earnest money if your loan isn’t approved. Your contract will outline how much time you have to secure financing.
4. Sale of Current Home Contingency
If you’re buying in Raleigh or Cary while selling your current home, timelines can get tight. A home sale contingency protects you if your current property doesn’t sell by a set date, often with a minimum price requirement.
5. Home Insurance Contingency
Most lenders require homeowners insurance before closing. If you can’t secure a policy, this contingency allows you to back out without penalty. While rare, it can be critical in certain areas where coverage is harder to obtain.
6. Title Contingency
A title search confirms that no one else has legal claims or liens on the property. If title issues are found and the seller can’t resolve them before closing, a title contingency lets you walk away with protection.
7. HOA Contingency
If the property is part of a homeowners association, this contingency allows you time to review the HOA’s rules and fees. If the restrictions don’t fit your lifestyle, you can withdraw from the purchase.
8. Suitable Housing Contingency
This contingency primarily protects sellers, allowing them to delay closing—or in some cases, cancel the deal—if they haven’t found a new home yet.
Should You Include Contingencies in Your Offer?
Most offers in the Triangle include at least one or two contingencies. Home inspection and appraisal contingencies are especially common because they protect buyers from major risks. Mortgage lenders may also require certain contingencies, such as home insurance.
However, too many contingencies can weaken your offer in a competitive Raleigh-area market. The goal is to balance protection for you as the buyer while keeping your offer appealing to the seller. That’s where working with an experienced local REALTOR® makes all the difference.
I’m Paul Huber, REALTOR® with Huber Real Estate, helping clients across Raleigh, Cary, Apex, Holly Springs, and Fuquay Varina. Whether you’re buying or selling, let’s connect and create a smart strategy for success.
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