The five contingencies that decide who keeps your deposit

What a contingency actually does

It makes your obligation to buy conditional on something. Satisfy it or waive it and you are committed; fail to act inside the window and, in most cases, you are committed anyway.

That last part is what catches people. Most Florida contingency periods work by silence: if you do not deliver written notice by the deadline, the contingency is deemed satisfied and the deposit is at risk. The clock does not stop because your inspector was busy.

The five

1. Inspection

Usually 7 to 15 days. It buys you the right to examine the property and, depending on which version of the contract you signed, either to cancel for any reason or only to request repairs. Those are very different rights — the “as-is” contract gives you the first, the standard contract the second. Know which one you have before you sign.

2. Financing

Typically 25 to 30 days. It protects you if the loan is denied for reasons outside your control. It does not protect you if you change jobs, buy a car, or switch lenders halfway through. Read our piece on what not to do after you apply — most financing failures are self-inflicted.

3. Appraisal

Often folded into the financing contingency, and that is a mistake worth correcting. If the property appraises below the contract price, a separate appraisal contingency gives you a clean exit. Without it, you may be obliged to cover the gap in cash.

4. Title

The title company searches for liens, easements, open permits and boundary problems. In Florida, open permits are the common one: work done by a previous owner and never closed out with the municipality, which becomes your problem at closing.

5. Association approval

Condominiums and many HOA communities have the right to approve a buyer, and some have a right of first refusal. This one has no substitute: if the association says no, the deal ends.

Waiving them to win a bidding war

It works, and it is how people end up owning a house they cannot insure.

In a competitive market buyers waive the inspection and the appraisal to make the offer cleaner. Understand what each waiver costs:

• Waiving inspection means buying the roof, the panel and the water intrusion unseen. In Florida the roof alone can be $18,000 to $35,000 and can make the house uninsurable until it is replaced.
• Waiving appraisal means agreeing to cover any shortfall in cash. Decide the maximum you will cover before you write it, and put that number in the clause.
• Waiving financing is the one to think hardest about. If the loan fails, the deposit is gone.

The dates are the whole document

Diary every deadline the day the contract is signed, and work backwards from each one.

Effective date, inspection deadline, loan application deadline, loan approval deadline, association application, walkthrough, closing. Those seven dates are what the contract really says. Everything else is context.