Jeni VanOrnum | Real Estate Insights & Education

Contingencies protect first-time homebuyers during the purchase process. I’m Jeni VanOrnum, your Douglas County real estate agent, explaining the critical contingencies you need when buying your first home in Douglas County, Colorado.

What Are Contingencies?

Contingencies are conditions that must be met for your home purchase to proceed. They’re built into your contract and provide legal ways to terminate the agreement and recover your earnest money if specific conditions aren’t satisfied. Think of them as protective escape clauses.

Inspection Contingency

This is your most important protection. You have a specified period (typically 7-10 days in Colorado) to inspect the property and either approve it as-is, negotiate repairs, or terminate the contract. During this time, you can back out for any reason—you don’t like the inspection findings, discover neighborhood issues, or simply change your mind. After this period expires, backing out means forfeiting your earnest money.

Financing Contingency

This contingency protects you if your lender denies your loan or can’t meet agreed terms. It specifies a deadline (typically 21 days) for your financing to be approved. If you diligently pursue financing but get denied, you receive your earnest money back. However, if delays result from your inaction—not providing requested documents, making large purchases, changing jobs—you could lose protections.

Appraisal Contingency

If the appraisal comes in below the purchase price, the appraisal contingency lets you renegotiate or terminate. For example, if you offer $450,000 but the home appraises at $430,000, you can ask the seller to lower the price, bring an additional $20,000 cash (if you can and want to), or walk away with your earnest money returned.

Title Contingency

This protects you if title issues emerge—liens, easements, ownership disputes. If the seller can’t provide clear title, you can terminate. This contingency typically runs concurrent with other contingencies and rarely causes problems, but it’s essential protection.

HOA Document Review

Colorado law gives buyers the right to review and terminate based on HOA documents. Many Douglas County communities have HOAs managing amenities and maintenance. You can back out if HOA rules, fees, or financial health concern you. This deadline is often shorter (3-5 days), so review documents promptly.

Seller Property Disclosure Review

Sellers must disclose known property defects. You have a short period to review disclosures and terminate if revelations concern you. Major undisclosed issues like foundation problems or past flooding can trigger this contingency.

Sale of Buyer’s Property

If you must sell your current home before buying (less common for first-time buyers), this contingency makes your purchase dependent on selling. Most sellers prefer offers without this contingency, as it adds uncertainty. In competitive markets, these offers struggle.

Managing Contingency Deadlines

Missing deadlines can cost you money or force you into unwanted purchases. Work closely with your agent (like me, Jeni VanOrnum) to track all deadlines. I use detailed timelines ensuring you meet every deadline and maintain all protections.

Strategic Contingency Negotiation

In competitive situations, some buyers shorten contingency periods to make offers more attractive—5-day inspection instead of 10 days, for example. But never waive inspection contingencies entirely. The risks far outweigh competitive advantages.

Get Protected

Ready to make protected offers on Douglas County homes? Contact Jeni VanOrnum today. I’ll ensure your contract includes proper contingencies and that you meet all critical deadlines.