FAQ: When is it a Good Idea to Waive Contingencies and When is it Not?

A: The shifting market is making it possible for buyers to once again include contingencies in their offers. Consider the following when deciding to keep or waive any of these three most common contingencies:

Inspection contingency:

» Don’t waive if there are no reports on the home.

» Don’t waive if you have reservations about the home or neighborhood.

» Consider waiving if there are inspections, reports, disclosures available that you’re confident in and you’re familiar with the area.

Appraisal Contingency:

» Don’t waive if you do not have enough reserves to cover the difference if the appraisal comes up short.

» Consider waiving if no loan is needed to purchase the property.

Loan Contingency:

» Not needed when no loan is needed to purchase.

» Consider waiving after you’ve talked with your loan officer.

In a multiple offer situation, removing contingencies can keep your offer competitive, but if you have any reservations, keep those contingencies — your safety net — in place.

The original article was posted in the San Francisco Chronicle on September 18, 2022.