How to Evaluate an Offer with a Financing Contingency

When a buyer includes a financing contingency in their offer, it means their purchase depends on successfully securing a mortgage. As a seller, understanding what this clause means—and how to manage the risks—can help you make the best decision for your sale.

🏦 What a Financing Contingency Means

A financing contingency protects the buyer by allowing them to cancel the contract (and recover their deposit) if they can’t obtain loan approval within a specified period—usually 21 to 30 days. It’s one of the most common clauses in real estate contracts, especially when buyers use traditional mortgage financing.

⚖️ How Financing Contingencies Affect Sellers

As a seller, a financing contingency introduces some uncertainty. The deal could fall through if the buyer’s loan is denied or delayed, which may force you to restart the selling process. However, not all contingent offers are bad—many close smoothly if handled properly.

  • Timeline: Expect 3–4 weeks for the lender’s underwriting and appraisal process.
  • Risk: The sale may be delayed or canceled if the buyer’s financing falls apart.
  • Leverage: Sellers can negotiate stricter timelines or require stronger pre-approval letters.

💰 Financing Contingency vs. Cash Offer

A buyer with a cash offer doesn’t need lender approval, so their transaction typically closes faster and carries fewer risks. By contrast, a financed offer can be just as solid—if the buyer’s lender is reputable and their pre-approval is verified. Learn more about the difference in our guide: What Is a Cash Offer in Real Estate?

📝 How to Evaluate a Contingent Offer

  • Ask for a copy of the buyer’s loan pre-approval letter.
  • Verify the lender’s reputation and track record.
  • Negotiate a shorter contingency period (e.g., 14–21 days).
  • Keep backup offers in play until financing is confirmed.
  • Consider accepting the offer with added protections, like a larger earnest money deposit.

💡 FSBO Tip: Stay in Control of the Process

When selling For Sale By Owner (FSBO) through a Brokerless Flat Fee MLS listing, you can evaluate offers confidently just like an agent would. Brokerless gives you direct MLS exposure to qualified buyers—both cash and financed—without paying a 6% commission.

Sell Smarter with Brokerless Flat Fee MLS

Brokerless helps you list your home on the MLS, attract serious buyers, and stay in control of negotiations—even when financing contingencies are involved.

List on the MLS with Brokerless

A financing contingency doesn’t have to derail your sale. With the right due diligence and clear timelines, FSBO sellers can confidently accept offers that balance security and flexibility—especially with Brokerless guiding the process.