The contingent term in the real estate purchase agreements is that the home seller accepts the buyer’s contracts. And they agree with the terms and the conditions of the home. When the buyer is proceeding to purchase the new real estate property, not only the economic terms, the buyers have to fulfill many terms and the conditions of the sellers of the purchase agreements.
Most purchase agreements are contingent on which two items? And what types of purchase agreements are contingent on? Let’s have a look at what contingent means in the real estate business.
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What Is Contingent Meaning In Real Estate?

When do you want to know most purchase agreements are contingent on which two items? You have first to know which types of things are counting as contingent in the real estate business. Contingent factors can vary from the financial terms to the other terms depending on the agreements before processing the buying and the selling. The real estate agreements are available for different terms and conditions.
From the start, the seller is going to need financial security so they can restrict and limit the money of the installments. Along with the financial issues there many other factors are also affecting real estate. Agreements. So when the buyers and the sellers of the real estate property are settling upon an issue. And finalize the deal, they are more often focusing on the two basic types of contingent factors for the better result and the clear dealings.
So let’s see most purchase agreements are contingent on which two items during the real estate property purchase deals.
What Are The Most Common Contingencies Visible In Purchases Agreements?

Home buyers are usually concerned about different contingencies when they are buying a home. There are different financing contingencies they can choose from. There are many house buyers who buy the house only to find out different funding or financing-related problems after the purchase is made.
Some smart buyers also often include an inspection contingency clause to keep their investment protected. Also, some of the buyers also consider a mortgage contingency where they ensure that they have the amount they need to pay for the mortgage for the house.
So, if we are talking about the most common contingencies at the time of purchasing a house, then two of them would be –
- inspection contingency clause
- And mortgage contingency.
It allows the house buyers to ensure that the purchase they are saving so much money for does not go wrong. These processes ensure that the house-buying process goes as smoothly as the house buyer had initially thought of.
Most Purchase Agreements Are Contingent On Which Two Items?
Most of the real estate dealings and property purchases are often depending upon the two types of contingencies.
- Financial Contingency
- Inspection Contingency
1. Financial Contingency :

Financial contingency is one of the answers for most purchase agreements are contingent on which two items? Here is the financing contingency. The seller is offering loans to the buyers who are interested in their property. The seller is always asking for a secure payment system for the property purchase. And for these, the seller is offering the financial contingency.
For example, when the sellers are offering the financial contingency, they write down the property buy offer with the two types of data: the address and the price of the property, along with the available financial contingency factor.
As we told you before, in the financing contingency, the seller is playing the role of the loan provider. The buyers, not every time, can get the loan from the bank or professional lenders. Often the buyers depend upon the financial contingency. The seller is offering the loan and making a signed agreement with the buyers. In the agreements, the property price and loan durations are clearly mentioned.
The Pros Of Financial Contingency:
Financial contingency is not for the sellers but for the buyers. This factor is significant.
Here are a few advantages of the financial contingency on the purchase agreements.
- Economic security. Most of the sellers who are offering the buyers the financial contingency plannings are going for less interest.
- The loan period is long and stable.
- The financial contingency agreement papers are not made upon the total cost of the property. The down payment is subtracted from the property prices. So automatically, the interest is not higher like the bank and the private lender’s interest amount.
The Cons Of The Financial Contingency
When you want to know about the most purchase agreements are contingent on which two items? Financial contingency planning is good, but every planning and process has some disadvantages.
- Even financial contingency has a great concept as it provides financial security on both ends. But eviction chances are always there. It is entirely dependent upon the agreements.
- The time is long. This long period is sometimes proved to be not very profitable for the sellers as they are expecting the total amount down payments.
2. Inspection Contingency

The inspection contingency is the second answer for most purchase agreements are contingent on which two items? The inspection contingency is another contingent factor.
Here the professional security checking officer is checking the security factors of the house. This is not a single-day inspection. Almost within seven to ten days, the security concerning officers is checking the security aspects of the house. Between this duration, if any problem can occur or the security concerning officers are not satisfied with the property stability and the structure. The property agreements can be canceled during this time.
The inspection contingency is mainly concentrating on the building material, house design, and building stability. If the security concerning officers is sending the green signals, then only the agreement is going to proceed.
The Pros Of Inspection Contingency
The pros of inspection contingency are when you are buying a new property, more or less, you do not know anything about it. But when you are proceeding after the inspection, your ideas about the house are becoming apparent.
- After the inspection, unusually building structural crisis occurring chances for the real estate property is limited.
- The buyer is getting the full assurances and the entire building structural ideas. In addition, these ideas are helping the buyers in the after-purchase property maintenance.
- If you are buying the property with the furniture, you will know if it is worth it or not; after the inspections. And prevent you from making the wrong decisions over the property purchase.
The Cons Of Inspection Contingency
The inspection contingency is always protecting the buyer from buying any racked house and unnecessary junkies.
- For the protection of the buyers, the inspections are quite an essential part of the agreements.
- After the cancellations, the seller has to publish another form of agreement to proceed with the property purchase. And this is all starting from the beginning.
- After the cancellation, if the buyer is interested in going for the deal with less money, this is merely possible when the sellers are prepared to make another property agreement. So the process is becoming lengthy.
What Are Some Other Contingencies?

Aside from the two different contingencies discussed here, there are other contingencies that you need to know about. Here are two more different contingencies you need to know about.
Home Sale Contingency
Home sale contingency lets the buyer purchase their house contingent on the existing property selling. This type of contingency can create difficulty for the seller. Hence they are often rejected by the seller.
Appraisal Contingency
There is an appraisal contingency that says that the property needs to appraise for a sale price at least. However, if the appraisal comes in lower than the agreed-upon term on the real estate contract, the buyer can terminate the sale.
The appraisal price is generally very common in the buyer’s market. When the real estate market favours the buyer, the buyer would normally waive the appraisal. They can also propose appraisal gap coverage.
Wrapping It Up:
These two the financial and the inspections these two are the answer for most purchase agreements are contingent on which two items? If you are planning to go for the real estate property sale or the buy, you have to process through these two phases. So how are you planning to process your property agreement? Do not forget to share your opinion in the comment sections.
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