Contingencies 101: How to Protect Yourself as a Seller

Selling your home is exciting, but it also comes with a lot of moving parts, and the contract stage is where many sellers feel the most uncertainty. That’s where contingencies come in. When handled correctly, they protect you, keep your sale on track, and ensure you maintain control throughout the process.

Below is a clear, seller-friendly guide to understanding the most common contingencies and how to use them to your advantage.

What Are Contingencies?

In a real estate contract, contingencies are conditions that must be met for the transaction to move forward. Think of them as safety nets - they allow buyers (and sometimes sellers) to address risks while still progressing toward settlement.

As a seller, understanding these contingencies helps you:

• Evaluate how strong an offer truly is
  
  

• Limit risk and delays
  
  

• Protect your bottom line
  
  

• Maintain leverage in negotiations
  
  

Meredith Fogle with The List Realty puts it simply:
“The right contingency strategy lets sellers stay protected without losing momentum. It’s all about knowing which terms offer true safety and which ones may introduce unnecessary risk.”

Key Buyer Contingencies Every Seller Should Know

1. Home Inspection Contingency

The buyer can inspect the home and request repairs, credits, or contract changes based on the results.

How to protect yourself:

• Consider allowing a pre-listing inspection so buyers feel confident upfront.
  
  

• Complete disclosures thoroughly so buyers have a clear idea of the condition of the home they are purchasing.
  
  

• Consider an “as-is” sale when appropriate (buyers can still inspect but cannot require repairs - and you still must disclose defects).
  
  

2. Appraisal Contingency

If the home doesn’t appraise at or above the contract price, the buyer can renegotiate or walk away.

How to protect yourself:

• Review recent comparable sales with your agent before pricing.
  
  

• Prioritize offers with appraisal gap coverage, where the buyer agrees to cover shortfalls (a popular buyer strategy in competitive markets).
  
  

• Stronger buyers may waive the appraisal contingency entirely.
  
  

3. Financing (Mortgage) Contingency

This allows the buyer to cancel if they cannot secure their loan.

How to protect yourself:

• Request strong pre-approval letters, not just pre-qualification.
  
  

• Favor offers from buyers with larger down payments.
  
  

• A shorter financing contingency timeline can keep things moving efficiently.
  
  

4. Home Sale Contingency

The buyer needs to sell their current home before they can buy yours.

How to protect yourself:

• Proceed carefully - this is one of the weakest contingencies from a seller’s perspective.
  
  

• Review the buyer’s listing status (Is it active? Is it priced appropriately?). Your agent can assist you with this step
  
  

• If you accept the offer, use a kick-out clause, which lets you continue to market your home and accept stronger offers.
  
  

Seller-Focused Strategies to Reduce Risk

Use Timelines to Your Advantage

Shorter contingency periods keep the deal on track and prevent prolonged uncertainty.

Lean on Your Agent’s Negotiation Expertise

Contingency strategy is one area where experience really matters.
As Meredith Fogle explains:
“The goal isn’t to eliminate contingencies; it’s to shape them so they support a smooth, confident sale for the seller.”

Clarify What You Will and Won’t Accept

Before offers start coming in, define your tolerance for risk.
For example:

• Are you comfortable with small repair requests but not requests for large credits or post-inspection price re-negotiation?
  
  

• Are you willing to accept an appraisal gap of $5,000 but not $20,000?
  
  

Setting boundaries upfront helps avoid emotional decision-making later.

When to Consider Flexibility

Even though you want to stay protected, some flexibility can help you secure a higher price or quicker sale. You may benefit from being open to:

• A short financing contingency from a well-qualified buyer
  
  

• A small credit for inspection items instead of repairs
  
  

• Limited concessions that keep negotiations smooth
  
  

A tailored approach is always the strongest approach.

Final Thoughts

Contingencies aren’t obstacles, they’re tools. When structured thoughtfully, they can strengthen your negotiating position, while giving your buyers peace of mind.

With expert guidance from a trusted local professional like Meredith Fogle with The List Realty, you can review offer terms with confidence and select an offer that aligns with your financial and timing goals, creating the best possible outcome in any market.