Contingencies You Should Never Waive When Buying a Home

Buying a home is the biggest purchase of your life. It will take up a big chunk of your savings, and you’ll be responsible for making monthly mortgage payments on it for years to come. So before you sign on the dotted line, make sure that there are no hidden costs that could turn what looked like a good deal into an expensive mistake.

One of the best ways to protect yourself is to ensure that there are contingencies in your purchase agreement. A contingency clause allows you to back out of the deal if certain conditions aren’t met. For example, you might require a home inspection before you finalize the purchase, or you may want the right to terminate the agreement if the seller can’t provide a satisfactory title search.

There are several contingencies that you should never waive when buying a home, no matter what. These include the right to inspect the property, terminate the agreement, and the appraisal contingency. If you’re unable to obtain financing, you should also never waive the mortgage contingency. Waiving any of these contingencies could cost you dearly in the long run. Some contingencies are more critical than others, and there are a few that you should never waive under any circumstances. Here are a few of them:

A Home Inspection

A home inspection is one of the most critical contingencies in a purchase agreement. It allows you to have a professional inspect the property for any significant defects that may not be visible to the naked eye. If the inspector finds something wrong with the house, you can use the report as leverage to get the seller to fix it or renegotiate the price of the home.

See also: Questions to Ask a Home Inspector Before, During, and After a Home Inspection

A neutral expert inspects the property for roofing, plumbing, structural, electrical, and other significant concerns during the inspection. It’s the same as accepting a ticking time bomb if you agree to waive it entirely. Without this safeguard, the buyer has no legal pathway in the event of a dispute or problem with the property. This is particularly true for waiving the buyer’s right to request repairs from the seller. This is a crucial secondary bargain between the parties. Many sellers are now demanding “As Is” sales, and buyers must agree not to request improvements.

The Appraisal

The appraisal contingency protects you in case the home you’re buying is worth less than the sale price. If the appraised value comes in lower than the purchase price, you can use that as leverage to renegotiate the price with the seller or walk away from the deal altogether. If the appraisal is not waived, the buyer has agreed to pay the contract price. Lenders utilize appraisals to calculate loan amounts, which leads to buyers paying more for a home than it appraises for and requiring extra cash to finish the transaction. Do not waive this condition unless you have the expertise of a professional Realtor on hand and are paying market value or more.

Also Read: Home Inspection Contingency: How to Negotiate Repairs?

The Right to Terminate the Agreement

The termination clause gives you the right to walk away from the deal if something doesn’t go according to plan. If the seller can’t provide a satisfactory title search, you should have the right to terminate the agreement. A title search is a process of looking for any liens or encumbrances on the property that could affect your ownership rights. If the seller can’t provide a clean title, you don’t want to be stuck with a home you can’t sell later because of those encumbrances.

The Mortgage Contingency

The buyer’s offer is contingent on acquiring a mortgage, as evidenced by the term “mortgage contingency.” If the buyer cannot obtain financing, they will lose their deposit. You should remove this condition only if you are paying cash for the property or have already been approved for a loan.

You should never waive the mortgage contingency if you’re taking out a mortgage loan to buy the home. This contingency protects you in case you’re unable to obtain financing. If the bank denies your loan for any reason, you can walk away from the deal without penalty.

Some buyers are tempted to waive the mortgage contingency because they’ve already been approved for a loan. But if something happens and you’re unable to close on the loan, you could be stuck in a bind.

Related: Mortgage and Homebuying tips for Newlyweds

Well and Septic Systems

Wells and sewage systems are critical components of the home. These systems may have health concerns and be expensive to repair. Repairs to a septic system may set you back thousands of dollars, so it’s essential to have a professional inspect them before buying the home. If the property is serviced by a well and has a septic system, the contingency for an inspection should never be waived or removed from the purchase contract.

Pest Inspection

Pests like termites can cause significant damage to a home and can be expensive to get rid of. And if the property is infested with pests, you may not be able to get rid of them without spending a lot of money. A pest inspection contingency should always be in place when buying a home, especially if the property is in a rural area.

The Right to Cancel the Agreement

If you find out that the property is in a flood zone or has other significant problems after you’ve already bought it, you should be able to cancel the agreement and get your money back. This is known as the due diligence period, and it’s one of the most critical contingencies in a purchase agreement and should never be waived.

The Right to Get Your Deposit Back

If the seller backs out of the deal, you should get your deposit back. This is known as the liquidated damages clause, and it’s another critical contingency that protects you from losing your hard-earned money.


Pets can cause damage to a home and may require expensive repairs down the road. If you have pets, you should never waive the contingency that allows you to have them inspected by a professional. Waiving this contingency is a risky move that could end up costing you in the long run.

So there you have it! These are the contingencies you should never waive when buying a home. While waiving some contingencies may seem like a good idea at the time, it could end up costing you down the road. So it’s always best to err on the side of caution and keep these crucial contingencies in place.

The Bottom Line

Waiving contingencies in a purchase agreement is a risky proposition. If something goes wrong with the property after you close, you will have no legal recourse. Make sure that you are aware of all the potential problems that could occur and only waive them if you are prepared to deal with the consequences.

Frequently Asked Questions

What is the mortgage contingency?

The mortgage contingency protects you in case you’re unable to obtain financing. If the bank denies your loan for any reason, you can walk away from the deal without penalty. 

What are examples of contingencies?

Some examples of contingencies are the mortgage contingency, the inspection contingency, the right to cancel the agreement, the right to get your deposit back, and so on.

What two items are most purchase agreements contingent on?

There are different types of contingencies in addition to the most common ones listed above. Purchase agreements are usually contingent on a satisfactory home inspection and mortgage loan approval. When adding these clauses to their contracts, buyers should take a “market-friendly” mentality. This means that they are protecting their interests without putting the seller in a difficult position.

How long does contingency last?

The contingency lasts between 30 to 60 days, depending on the state where the property is located and what type of contingencies are in place. A contract is canceled if the buyer cannot obtain a loan in the agreed period. If the buyer cannot do so, the seller may elect to cancel the agreement and look for another buyer.

What does it mean if a contingency is waived?

When a contingency is waived, the buyer has agreed to purchase the home without that special protection. For example, if a buyer waives the inspection contingency, they agree to buy the home regardless of any discovered problems.

Can I still back out of the purchase after waiving a contingency?

Yes, a buyer can always back out of the purchase agreement even if they have waived a contingency. However, they may be subject to penalties or other consequences depending on the situation.

Written by

Rostislav Shetman is the founder of 9Kilo Moving. He has been in the moving and relocation industry for more than 25 years, making him an expert in his field. Rostislav started as a helper, dispatcher and driver and has worked his way up to owning his own company. He takes great pride in his work and enjoys helping people relocate across the United States of America. When he's not working, Rostislav enjoys spending time with his family and friends. They are the light of his life and bring him happiness every day.