If you’re buying or selling a home in San Diego, you’ll likely hear the word “contingency” early in the process. These are specific conditions written into the purchase agreement that must be met for the sale to move forward. Understanding how contingencies work can protect your interests and help ensure a smooth transaction.
Top Contingencies in San Diego Real Estate
Home Inspection Contingency
This gives the buyer the right to thoroughly inspect the property—often within the first 17 days. If anything unexpected comes up (plumbing issues, roof damage, or safety concerns), the buyer can request repairs, renegotiate, or potentially cancel the deal without penalty.
Appraisal Contingency
When a buyer is financing the purchase, the lender will require a professional appraisal. If the home doesn’t appraise for the purchase price, the buyer has the option to renegotiate or withdraw their offer.
Loan Contingency
Even with preapproval, loan funding isn’t guaranteed. This contingency allows the buyer to back out if they’re ultimately unable to secure financing within the agreed timeframe, usually about 21 days.
Insurance Contingency
Increasingly important in California, this contingency ensures the buyer can obtain acceptable fire and homeowners insurance. If coverage is denied—or premiums are unreasonably high—the buyer may cancel the contract. We recommend beginning this search right away, and we’re happy to refer trusted insurance providers.
Why Contingencies Matter
For buyers, contingencies offer a layer of protection while they do their due diligence. For sellers, understanding contingency timelines and preparing the property ahead of time can help avoid delays or complications. Once contingencies are lifted, the buyer’s earnest money becomes non-refundable, and the deal is one big step closer to closing.
Whether you’re buying or selling, having a trusted real estate team to help manage the contingency process is essential for a successful and stress-free experience.