Hawaii Pre-Licensing National Practice Exam 2025 – Your Complete Prep Guide

In real estate transactions, contingencies are conditions that must be met for the contract to be binding. They provide buyers and sellers with protections regarding various aspects of the deal.

A financing contingency allows buyers to secure mortgage financing without the risk of losing their deposit if they fail to obtain a loan. This is particularly important as it ensures that the buyer can afford the property, thereby protecting the seller from wasting time if the buyer cannot secure funding.

An inspection contingency is essential as it enables buyers to have the property professionally inspected within a specified timeframe. If serious issues are found, the buyer can negotiate repairs, ask for concessions, or even withdraw from the contract without penalty if the contract allows it.

An appraisal contingency is included to protect buyers from overpaying for a property. If the appraisal valuates the property at a lower price than the offer, the buyer can renegotiate the purchase price or back out of the deal entirely if the contract includes provisions for this.

All these contingencies are commonly included in real estate contracts, as they provide buyers with necessary protections while also establishing clear conditions for moving forward in the transaction. This makes the answer indicating that all of the mentioned contingencies are common in real estate contracts accurate.