Step 18: Remove Your Contingencies
As each condition is satisfied, release the matching contingency in writing, on time.
Each contingency in your contract has a deadline. In many states, you must remove (or release) each one in writing by its deadline; in others, it's removed automatically if you don't act. Know which rule your contract uses.
The usual order
- Inspection contingency: once repairs or credits are agreed, often 7 to 10 days in.
- Appraisal contingency: once the appraisal is at or above the price, or a gap is resolved.
- Financing contingency: once the loan is approved, often 21 to 30 days in.
What removing a contingency means
After you remove a contingency, you can no longer cancel for that reason and keep your earnest money. Don't remove the financing contingency until your loan is approved with only routine conditions left.
If you need more time
If the appraisal or underwriting is running late, ask the seller to extend the deadline with a signed addendum before it passes. Don't let it lapse.
Next: clear to close.
Your next move, by loan program
- Conventional: Don't release the financing contingency until you have at least a conditional approval with only routine conditions left. Review my contract
- FHA: Make sure required FHA repairs are agreed with the seller before you release the inspection or appraisal contingency. Review my contract
- VA: The VA amendatory clause protects your deposit if the appraisal is low, even after other contingencies are released. Review my contract
- USDA: USDA's final review comes after lender approval. Ask for a financing deadline that leaves time for it. Review my contract
- Jumbo: If a second appraisal is required, keep the appraisal contingency until both are back. Review my contract
- Investor: For a flip, confirm your contractor bids and rehab budget before you release the inspection contingency. Review my contract