What Contingencies Should I Include in My San Diego Home Purchase Offer?

What Is a Contingency?

A contingency is a condition in your purchase contract that must be satisfied before you are obligated to complete the purchase. If a contingency is not satisfied and you cancel during the contingency period, you are entitled to a full refund of your earnest money deposit. Contingencies are your contractual protection — they allow you to exit the deal without penalty if certain conditions are not met.

The Three Standard Contingencies in California

• Inspection contingency: Gives you the right to conduct a physical inspection and cancel or negotiate repairs based on findings — standard period is 17 days in the CAR RPA
• Loan contingency: Protects you if your lender cannot fund your loan — gives you the right to cancel and receive your deposit back if financing falls through — standard period is 21 days
• Appraisal contingency: Protects you if the property appraises below your purchase price — gives you the right to cancel or renegotiate if appraised value does not support the agreed price

When to Include All Three

For most San Diego buyers — particularly first-time buyers and those financing their purchase — including all three standard contingencies is the prudent approach. These contingencies exist to protect you from the three most common causes of transaction failure: unexpected property defects, financing problems, and overpriced homes.

When Waiving Contingencies May Be Appropriate

• Waiving inspection contingency: Only for experienced buyers who have done thorough pre-offer due diligence or are buying a new construction home
• Waiving appraisal contingency: Appropriate when you have sufficient cash reserves to cover any appraisal gap
• Waiving loan contingency: Only for cash buyers or those with full lender commitment and ability to close without contingency protection

Rieder Homes Group Contingency Guidance

Every buyer situation is different. We help our San Diego buyer clients evaluate the risk-reward trade-off of each contingency based on the specific property, market conditions, and their personal financial profile. We never pressure buyers to waive contingencies beyond their risk comfort level.