08/01/2026
Allison's Weekly
Market Pulse
Tracking Trends, Values, and Opportunities
How Contingencies Work and When Waiving One Is a Mistake
If you own a property in Southwest Florida, whether you are buying or selling, contingencies are one of the most important parts of any purchase contract. They are also one of the most misunderstood.
A contingency is a condition that must be met for the transaction to move forward. If the condition is not met, the party protected by that contingency has the right to exit the contract, typically without losing their deposit. Think of contingencies as the built in checkpoints between going under contract and sitting down at the closing table.
The 4 most common ones are inspection, appraisal, financing, and HOA review.
The inspection contingency gives the buyer a window, typically 10 to 15 days in Florida, to have the property professionally inspected and to negotiate repairs, credits, or cancellation based on what is found. It is not a guarantee that the seller will fix everything. It is the buyer's opportunity to fully understand the condition of the property before committing. Waiving this contingency means accepting the property as is, with no contractual basis to revisit the price or ask for repairs regardless of what an inspection might reveal.
The appraisal contingency protects the buyer if the property does not appraise at the contract price. As covered in a previous issue, when a lender will only finance based on the appraised value, this contingency gives the buyer options. Waiving it means agreeing to cover any gap between the appraised value and the contract price out of pocket, no matter how large that gap turns out to be.
The financing contingency protects the buyer if their loan does not come through. Even buyers who are pre-approved can face unexpected changes in their financial situation or in lender requirements between contract and closing. This contingency allows them to exit without penalty if financing falls apart through no fault of their own. Waiving it exposes the buyer's deposit if the deal cannot close due to a loan issue.
The HOA review contingency, sometimes called the condo documents contingency, gives the buyer time to review the association's governing documents and financials after they are delivered. In Florida, buyers have 3 days to cancel after receiving those documents. This contingency is especially relevant in Southwest Florida given how many communities here are HOA governed.
In competitive markets, buyers are sometimes pressured to waive one or more of these contingencies to make an offer more attractive. That strategy can work, but it should be a deliberate and informed decision, not a reflexive one made under pressure. Each contingency exists because real things go wrong in transactions. Waiving one means accepting that risk entirely.
For sellers, understanding which contingencies are in your contract and what triggers each one is just as important. A clean offer is not always the one with the fewest contingencies. It is the one from the buyer most likely to close.
If you have questions about how contingencies affect a deal you are navigating, I am always glad to talk through it.
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