Contingencies are escape hatches in a real estate contract. They let you walk away from the deal without penalty if certain conditions are not met. You might, for example, sign a contract to buy a building, but make your obligation to close contingent on things such as the following:
(1) Your being able to get a mortgage loan of at least 75% of the purchase price.
(2) Your having a contractor inspect the condition of the building and your being satisfied with the contractor’s report.
(3) Your determination that the building can be renovated to your satisfaction.
(4) Your being satisfied with a report you will order concerning environmental hazards.
Your lawyer can help you put the right contingencies in the contract for your deal.
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