GLOSSARY — REAL ESTATE TERMS

Contingency Period

A contingency period is a set window of time in a purchase contract during which a buyer can investigate the property, review disclosures, and secure financing -- with the right to cancel and recover their deposit if a specific condition isn't met.

Typical contingency timelines in California

The California Residential Purchase Agreement sets default contingency periods that both sides negotiate at contract: commonly around 17 days for the inspection contingency and 21 days for the loan contingency, though every timeline is negotiable in the offer.

What happens when a contingency expires

If a buyer doesn't actively remove a contingency in writing by its deadline, it typically remains active until removed or the seller issues a formal notice to perform, which can accelerate the deadline. Removing a contingency in writing signals the buyer is satisfied and generally puts their deposit at greater risk if they cancel afterward for a reason tied to that contingency.

How the clock actually runs

If escrow opens on day 1, a 17-day inspection contingency and 21-day loan contingency both count calendar days, not business days, from that date -- meaning a Friday escrow opening still has the same deadline as a Monday opening, which occasionally surprises buyers used to business-day timelines elsewhere.

WHAT TO DO THE DAY ESCROW OPENS

Mark every contingency deadline on your calendar immediately
Confirm in writing whenever you formally remove a contingency
Never assume a contingency is still active without checking the written record
Ask your agent for a written contingency timeline at the start of escrow

What's the difference between a contingency and a disclosure?

A contingency is a condition that lets a buyer cancel the contract under specific circumstances. A disclosure is information the seller is legally required to provide about the property's condition -- disclosures inform decisions, contingencies protect the ability to act on them.

Can contingency periods be shortened to make an offer more competitive?

Yes, and it's a common negotiating tactic in competitive markets, though shortening timelines increases the buyer's risk of not fully completing inspections or financing in time.

What happens to my deposit if I cancel within an active contingency?

Canceling for a reason covered by an active, unremoved contingency typically allows the buyer to recover their earnest money deposit.