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Contingency
A contingency is a condition that must be met for a contract to be valid and binding. In the case of a real estate offer, a contingency may include many things that could possibly happen to prevent the sale from closing. Some buyers will make their offer contingent upon the sale of their own home. In this case, the buyer could back out of the deal if their home never sold. There would be no repercussion for backing out of the deal. There are many ways a contingency clause may be used. Offers can be subject to certain closing dates. Buyers sometimes limit their offer to their ability to obtain a favorable mortgage rate. When property value is uncertain, a definite appraised value may be stipulated. Accepting an offer with a contingency clause can be a good way to obtain a sale. Make sure that both parties can live with the outcome should the contingency come into play.