A Contingency is a Condition

I would like to take a minute to talk about contingencies and what they mean in an offer. A contingency is a condition that must be met or the contract can be voided. A buyer contingency generally means that a buyer can get out with a full refund of their earnest money. Though rare, a seller contingency means they can cancel the agreement and give the buyer back their earnest money but not be bound to sell.

Most buyer contingencies are pretty straightforward - contingent on inspection, contingent on appraisal, contingent on financing - and if any of those are not met to the buyer's satisfaction, they can back out and generally get a refund of their earnest money. The only general seller contingency I can think of at the moment would be if a seller makes the offer contingent on them finding a place to purchase, which has happened a few times where they can't find anything acceptable, and they cancel the purchase agreement.

Buyers are not supposed to use contingencies as a way to get out of the purchase. They are supposed to be just a protection. However, there is not much a seller can do if a buyer chooses to get out on a contingency. If a buyer says the inspection is unsatisfactory and they cancel the purchase agreement, a seller can take them to court and try to make them purchase or keep the earnest money. But in reality, a judge is not going to force a buyer to purchase a property or generally forfeit earnest money based on the offer being contingent on inspection. At that point, if that same offer is contingent on financing, the buyer can tell the lender they're not going to pay the loan, then the lender will not lend them the money and they could get out on that contingency.

I have generally found that if a buyer wants to buy, and a seller wants to sell, there isn't anything they can't get through! Conversely, if a buyer wants out and there are any contingencies on the sale, they can find a way out. That is just the sad reality of it. It is somewhat harder for a seller to get out because generally they do not have any contingencies allowing them to do so. The buyer can take the seller to court to try to force them to sell or to get damages, and sometimes they can if there were no specific seller contingencies.

As a buyer or the seller, talk with your agent about the contingencies in your offer and what they mean for you. I hope this is helpful to you.