Definition of term
A contingency is a condition required for a home purchase to go through. Contingencies protect the buyer's interests and can cover various issues such as financing, inspections, and appraisals. The buyer may have the option to cancel the purchase contract and get their earnest money deposit back if the contingencies are not met. In some cases, the buyer and seller can negotiate contingencies. For example, if the home inspection reveals significant damage, the contingency can be used to negotiate who will pay for the repairs.