Accepting an offer feels like the finish line. It isn't — it's the starting gun. From acceptance to closing, your buyer holds a set of contingencies: contractual exit doors that let them cancel and recover their deposit if specific conditions aren't met. Understanding the contingency clock — what each one covers, when it expires, and how removal works — is how sellers keep leverage through escrow instead of surrendering it.
This post covers the contingency mechanics specifically. For the broader escrow process end to end, see our escrow guide.
The Big Three Contingencies
- Investigation (inspection) contingency: the buyer's window to inspect everything — general home inspection, roof, sewer, termite, anything they choose — and to cancel or renegotiate based on what they find.
- Appraisal contingency: protects the buyer if the lender's appraisal comes in below the purchase price.
- Loan contingency: protects the buyer if their financing falls through despite good-faith effort.
In the standard California purchase agreement these default to 17 days, but every one of them is negotiable — and in competitive situations buyers routinely shorten them to 10, 7, or fewer days to strengthen their offer. The dates in your accepted contract are the dates that matter, so know them cold.
Critical California Detail: Removal Must Be Active
Here's the part that surprises sellers: in the standard California agreement, contingencies don't expire automatically when their period ends. The buyer must actively remove them in writing. If day 17 passes and the buyer hasn't signed a contingency removal, the contingency is still alive — the deadline's passing alone doesn't kill it.
The seller's tool when a deadline passes is the Notice to Buyer to Perform: a formal demand that the buyer remove the contingency within a short window, after which the seller gains the right to cancel. A well-run listing tracks every contingency date and sends notices promptly — not to be aggressive, but because an escrow where deadlines drift is an escrow where the buyer keeps a free exit while your home sits off the market.
What Each Phase Looks Like From the Seller's Side
Week one: the buyer's deposit goes into escrow, disclosures go out, and inspections get scheduled. Expect inspectors at the property — general, termite, and often sewer or roof specialists. Keep utilities on and the home accessible; access delays extend the buyer's clock.
The inspection response: after inspections, buyers commonly submit a Request for Repairs — asking for fixes, credits, or a price adjustment. This is a negotiation, not a demand you must meet. Your options run from agreeing, to countering with a credit, to declining. The right answer depends on what the findings are, what your market position is, and whether the requests are material or cosmetic. Health-and-safety items deserve seriousness; a list of cosmetic nitpicks deserves a firm, polite counter.
The appraisal: the lender orders it during the same window. If it comes in at or above price, it passes silently. If it comes in low, you're in an appraisal-gap negotiation — a big enough topic that it gets its own post.
Loan approval and final removals: once underwriting clears, the buyer removes the loan contingency. When all contingencies are removed in writing, the buyer's deposit is genuinely at risk if they walk — which is the moment your sale becomes solid. From there it's closing logistics: buyer's final walk-through, signing, funding, and recording.
The Seller's Contingency Checklist
- Calendar every contingency date the day escrow opens — yours is a countdown, not a suggestion.
- Make access easy. Every rescheduled inspection is a gift of extra time to the buyer's exit rights.
- Respond to repair requests strategically, not emotionally. Credits often beat repairs: they close the issue without contractor scheduling risk before closing.
- Send performance notices promptly when deadlines pass. Politely enforced timelines are how escrows close on schedule.
JP Dauber is a licensed California broker (DRE #01499918) with 21+ years and 169+ closed transactions across the Inland Empire — which means a lot of contingency clocks managed to on-time closings. SoldByJP provides full-service home selling, including complete transaction management, at a 1% listing fee. Get your free home valuation →