Every contingency is a door with a clock on it

Quick answer: Keep the inspection, financing and appraisal contingencies, and add title review where your state uses it. Be careful with a home-sale contingency in a busy market, and never write one that lets you walk away "if I'm not satisfied." Whatever you keep, put every deadline on your calendar the day you sign.

What a contingency actually is

It's an exit. Your signed purchase contract says you'll buy the house, and each contingency names a condition under which you can leave and get your earnest money back. Miss the condition's deadline and, in most contracts, the door locks. No notice from anyone. The window just closes.

That's the part people get wrong. They think the danger is having too many contingencies or too few. The bigger danger is a contingency you forgot had an expiration date.

Everything below is general education. Contracts, deadlines and customs vary by state and county, so have a licensed real estate attorney or your agent read your actual contract before you sign it.

The three that protect you

Inspection. You hire a licensed inspector, typically within a window of about a week to ten days. If the report turns up a bad roof, a leaking drain line or a dead furnace, you can renegotiate or leave with your deposit. We've written about why the home inspection is your last cheap exit. Give it the respect it earns.

Ask for the big stuff: structure, roof, active leaks, electrical hazards, heating and cooling that don't work. Don't hand the seller a 40-item list that includes paint and a dated faucet. A seller who feels nickel-and-dimed starts looking at the backup offer.

Ask for a credit instead of repairs when you can. You control the quality of the work, and you don't have to trust a seller who's already mentally moved out. Lenders cap how much seller credit they'll allow, so ask yours before you ask the seller.

Financing. This one protects your deposit if the loan falls through. Say you put down $3,500 in earnest money on a $350,000 house (an example, not a market figure). If your lender denies the loan after a clean underwriting review and you have a financing contingency, you get the $3,500 back. If you waived it, the seller may be entitled to keep it.

A preapproval letter isn't an approval. The real test is underwriting, where somebody checks your paystubs, your bank statements and your credit again. Don't change jobs, open a credit card or finance a truck between contract and closing. Your lender will tell you the same thing. And remember that the bank will approve you for too much house, so decide what payment you can live with before you shop.

Appraisal. The lender won't lend more than the house appraises for. Worked example: you offer $350,000 with 20 percent down, expecting a $280,000 loan. The appraisal comes back at $335,000. The lender now lends 80 percent of $335,000, which is $268,000. You're $12,000 short, and that's cash you have to find.

With an appraisal contingency, you can renegotiate the price, split the gap with the seller, or leave. Without one, you cover the gap or lose your deposit. Don't waive this one unless you could comfortably write that check.

The ones that depend on your state

Title and survey review. The title company runs a search and issues a title commitment, which lists liens, easements and ownership problems. You want to see it before you're locked in. A contractor's lien from three owners ago is far cheaper to find now than after closing.

Attorney review. Some states build in a short window for attorneys to review the contract, and in others a lawyer is customary at closing. Your agent can tell you which applies, but a real estate attorney will tell you what it means for you.

HOA documents. If there's a homeowners association, you'll be given its rules, budget and any special assessments. Read the reserve fund numbers. An HOA with no savings and an aging roof will eventually send a bill to every owner.

The ones that kill deals

"I get to think about it." Some buyers want a clause letting them cancel if they're not satisfied with the property for any reason. Sellers read that as a free option on their house. A good seller won't give it, and a good agent won't write it.

The home-sale contingency. It says you'll buy only if your current house sells. It protects you from owning two mortgages. It also tells the seller their sale depends on a stranger's sale, which depends on another stranger's loan. In a slow market, a seller may accept it. In a busy one, your offer goes to the bottom of the stack.

If you need one anyway, ask about a kick-out clause. The seller keeps marketing the house, and if a better offer arrives you get 48 hours to remove your contingency or step aside. It's fairer to everyone. Other options: sell first and rent back from the new owner for a few weeks, or talk to your lender about bridge financing.

Stacked, long windows. A 30-day inspection period and a vague financing deadline make your offer look like a hedge. Shorter, specific windows read as a buyer who knows what he's doing.

When waiving makes sense, and when it doesn't

Waiving the inspection is the move everyone's cousin brags about. It can make sense for an experienced investor who can price the unknowns and handle the repairs, or a buyer who paid for a pre-offer inspection and already knows what's wrong. For a first-time buyer on a 1970s house, it's gambling with the family's savings. How to win a bidding war without waiving your inspection covers the ways to compete without doing that.

Better levers: a larger earnest money deposit, a shorter inspection window, a flexible closing date, and a letter from your lender saying the file is already through underwriting. None of those cost you your exit. Our walkthrough of the twelve steps from preapproval to keys shows where each deadline falls.

Before you sign

• Write every contingency deadline on a calendar the day the contract is signed, with a reminder two days before each one.
• Make sure each deadline names a date, not just "within a reasonable time."
• If you need more time, get the extension in writing and signed by both sides. A text message isn't an amendment.
• Know who holds your earnest money (usually the title company or the seller's broker) and what the contract says happens to it if you walk.
• Have a licensed real estate attorney, your agent and your lender read the same contract. Each will catch something different.

Nobody can tell you from here which contingencies your deal needs. That depends on your state, your loan, your house and your savings. But the rule that holds everywhere is simple. You can only use the exits you've kept, and only before the clock runs out.