Real Estate & Property Law
Residential Purchase Agreement Contingencies in Pennsylvania
Last updated February 2026
7 min read
When you sign an agreement to buy a house in Pennsylvania, you're entering a binding contract. Contingencies are the clauses that let you back out — and get your deposit back — if specific conditions aren't met. Understanding what they protect you from (and what happens when you waive them) can save you from the most expensive mistake of your life.
A contingency is a condition that must be satisfied before the sale is finalized. If the condition isn't met, the buyer can terminate the agreement and typically receives a full refund of the deposit (also called hand money or earnest money). Most residential transactions in Pennsylvania use the Standard Agreement for the Sale of Real Estate (the PAR form), which includes several built-in contingencies.
This is the most important contingency for buyers. It gives you the right to have the property professionally inspected and to negotiate or withdraw based on the findings.
What it covers: Structural integrity, roofing, electrical, plumbing, HVAC, water intrusion, pest infestation, radon, and other physical conditions. Specialized inspections (septic, well, environmental) should be specified if applicable.
Timeline: The inspection period is negotiated in the contract — typically 10 to 15 days, though this varies by market conditions and negotiation.
Your options after inspection: Accept the property as-is, request repairs or credits, renegotiate the price, or terminate the agreement entirely. The specific options available depend on the contingency language in your contract.
This protects you if your mortgage application is denied. Without it, you could lose your deposit if your lender declines to fund the loan.
Pre-approval vs. pre-qualification: A pre-qualification is a lender's rough estimate. A pre-approval involves actual underwriting — income verification, credit pull, debt analysis. Pre-approval is far more reliable but is not a guarantee of final approval.
Good faith effort: The contingency typically requires you to make a good faith effort to obtain financing. You can't deliberately sabotage your own application to use this as an escape hatch.
The buyer's lender will order an appraisal to confirm the property is worth the purchase price. If the appraisal comes in below the agreed price, the appraisal contingency gives you options:
Renegotiate: Ask the seller to lower the price to the appraised value.
Make up the difference: Pay the gap between appraised value and purchase price out of pocket.
Walk away: Terminate the agreement and get your deposit back.
The title company conducts a search to verify the seller has clear, marketable title. If the search reveals problems — unreleased mortgages, judgment liens, boundary disputes, easement issues, estate title defects — the title contingency allows you to object and, if the issues can't be resolved, terminate the agreement.
See our title searches and title insurance guide for details on what a title search covers.
Sale of existing home: If you need to sell your current house to fund the purchase, this contingency protects you. Sellers generally dislike this contingency because it makes the deal uncertain.
HOA/condo review: Allows review of homeowner association documents, rules, financial statements, and pending assessments before committing. See our HOA disputes guide.
Well and septic: For properties not on public water and sewer, inspection and testing of the well and septic system should be a separate contingency.
Under 68 Pa.C.S. § 7301 et seq. (the Real Estate Seller Disclosure Law), sellers of residential property must provide a written disclosure statement covering known material defects. This includes structural issues, water problems, environmental hazards, boundary disputes, and other conditions affecting value. The buyer has the right to terminate within a specified period after receiving the disclosure.
See our seller disclosure guide for the complete requirements.
Every contingency you waive shifts risk from the seller to you. Your deposit — typically 1% to 3% of the purchase price — is at stake. If you waive inspection and discover a cracked foundation after closing, that's your problem. If you waive financing and your loan falls through, you may forfeit your deposit and face a breach of contract claim.
The standard PAR form is written to be balanced, but every transaction has unique facts. An attorney can modify contingency language to better protect your interests, ensure deadlines are realistic, and flag issues the standard form doesn't address. For most buyers, the cost of attorney review is a small fraction of the purchase price — and a fraction of what a missed issue could cost.
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