What Las Vegas Sellers Should Know About Buyer Contingencies

by Ryan Rose

You receive an offer. The price looks good. But buried in the contract are contingencies: inspection, appraisal, financing, maybe more. What do these mean for you?

Contingencies are escape hatches for buyers. Understanding them helps you evaluate offers and negotiate effectively.

Inspection Contingency

This gives the buyer the right to have the home professionally inspected and negotiate repairs or cancel based on findings.

Typical timeframe: 10-15 days from contract acceptance.

What happens: Buyer hires an inspector. They find issues (they always find issues). Buyer requests repairs or credits. You negotiate.

Seller risk: Buyer can cancel for virtually any reason during the inspection period, often getting their earnest money back.

Your leverage: After the inspection period expires, buyers lose this exit option. Some sellers negotiate shorter inspection periods to reduce risk.

Appraisal Contingency

This protects the buyer if the home appraises below the contract price. If it does, the buyer can renegotiate or cancel.

Typical timeframe: Usually tied to financing timeline, around 21-30 days.

What happens: Lender orders appraisal. If value comes in low, buyer can request price reduction, bring extra cash, or walk away.

Seller risk: You might have to lower your price or lose the sale entirely.

Your protection: Price your home based on comparable sales to minimize appraisal risk. In today's market, with 61.5% of homes selling below asking, aggressive pricing usually appraises fine.

Financing Contingency

This allows the buyer to cancel if they can't secure mortgage approval.

Typical timeframe: 21-30 days, sometimes longer.

What happens: Buyer applies for loan. Lender underwrites. If loan is denied, buyer can cancel and get earnest money back.

Seller risk: You take your home off market, turn away other buyers, then the financing falls through weeks later.

Your protection: Require strong pre-approval letters (not just pre-qualification). Ask about down payment source. Cash buyers eliminate this contingency entirely.

Sale Contingency

This means the buyer must sell their current home before purchasing yours.

What happens: If their home doesn't sell, they can't buy yours. You wait on their sale to close.

Seller risk: High. You're dependent on a transaction you don't control. Their sale could fall through, take longer than expected, or never happen.

Your options: Many sellers refuse sale contingencies entirely. Others accept with a "kick-out clause" allowing you to keep marketing and accept other offers.

How Contingencies Affect Offer Strength

Fewer contingencies = stronger offer. In order of strength:

Strongest: Cash, no contingencies, quick close.

Strong: Financed with only standard inspection and appraisal contingencies.

Moderate: All contingencies plus requests for concessions.

Weakest: Sale contingency, extended timelines, multiple outs.

In today's market where buyers have leverage, you'll see more contingencies than during the frenzy years. That's normal. But you can still negotiate.

Negotiating Contingencies

Shorten timeframes. A 7-day inspection period is better than 15. A 21-day financing contingency is better than 30.

Increase earnest money. Larger deposits signal commitment and give buyers skin in the game.

Require pre-approval strength. Fully underwritten pre-approvals are more reliable than basic pre-qualification letters.

Reject or counter weak offers. Sale contingencies or excessive timelines might not be worth the risk.

The Bottom Line

Contingencies are part of most real estate transactions. Understanding what each one means helps you evaluate offers beyond just price. Sometimes a lower offer with fewer contingencies is worth more than a higher offer with multiple escape hatches.

Need help evaluating offers on your Las Vegas home? Let's review what's on the table.

Frequently Asked Questions About Buyer Contingencies in Las Vegas

Q1: What is a buyer contingency in a real estate contract?

A buyer contingency is a condition written into the purchase contract that must be met for the sale to proceed. It serves as an escape hatch allowing buyers to cancel the contract and recover their earnest money if specific conditions aren't satisfied. Common contingencies include inspection, appraisal, financing, and sale of current home.

Q2: How long does the inspection contingency typically last in Las Vegas?

The inspection contingency in Las Vegas typically lasts 10-15 days from contract acceptance. During this time, the buyer can have the home professionally inspected and request repairs, credits, or cancel the contract based on findings. Sellers can negotiate for shorter timeframes (such as 7 days) to reduce their risk exposure.

Q3: Can a seller reject an offer with too many contingencies?

Yes, sellers can reject offers with excessive contingencies or counter with modified terms. Sellers aren't obligated to accept any offer, regardless of price. Many Las Vegas sellers reject offers with sale contingencies entirely or require kick-out clauses. You can also counter by shortening contingency timeframes or requesting larger earnest money deposits.

Q4: What happens if a home doesn't appraise for the contract price?

If the home appraises below the contract price and there's an appraisal contingency, the buyer can request a price reduction to match the appraised value, bring additional cash to cover the difference, or cancel the contract. Sellers can refuse to lower the price, but risk losing the sale. Proper pricing based on comparable sales helps minimize appraisal issues.

Q5: What's the difference between a pre-qualification and pre-approval letter?

A pre-qualification is a basic estimate based on self-reported financial information, while a pre-approval involves verification of income, assets, and credit. Fully underwritten pre-approvals (where most underwriting is complete) are strongest. As a Las Vegas seller, you should request strong pre-approval letters to reduce financing contingency risk, not just basic pre-qualification.

Q6: Should I accept an offer with a sale contingency?

Sale contingencies carry high risk because you're dependent on a transaction you don't control. Many sellers refuse them entirely. If you consider one, negotiate a kick-out clause allowing you to continue marketing and accept backup offers. If another acceptable offer comes in, the first buyer gets a limited time (typically 72 hours) to remove their contingency or lose the contract.

Q7: Does a cash offer eliminate all contingencies?

Not necessarily. Cash offers eliminate the financing contingency, but buyers can still include inspection and appraisal contingencies. However, cash buyers often waive appraisal contingencies since they don't need lender approval. The strongest offers are cash with no contingencies and quick closing timelines, but even cash buyers typically retain inspection rights.

Q8: How can I strengthen my position when evaluating offers with contingencies?

Negotiate shorter contingency timeframes (7-day inspection instead of 15), request larger earnest money deposits to increase buyer commitment, require fully underwritten pre-approvals rather than basic letters, and consider the total package rather than just price. A lower-priced offer with fewer contingencies and faster timeline may be worth more than a higher-priced offer with multiple escape hatches.

Q9: What happens to earnest money if a buyer cancels during a contingency period?

If a buyer cancels during an active contingency period for reasons covered by that contingency, they typically receive their earnest money back. For example, canceling during the inspection period due to inspection findings, or canceling due to loan denial during the financing contingency. Once contingency periods expire, buyers risk losing earnest money if they cancel.

Q10: Are contingencies more common in today's Las Vegas real estate market?

Yes. With 61.5% of Las Vegas homes selling below asking price, buyers have more leverage than during previous seller's markets. This means more contingencies, longer timeframes, and more negotiation over repairs. This is normal market behavior. However, sellers can still negotiate terms and shouldn't accept unfavorable contingencies just because it's a buyer's market.