What Is a Title Contingency in Real Estate?

A title contingency is a clause in a purchase agreement that allows the buyer to withdraw from the contract if the property’s title report reveals issues—such as liens, claims, unpaid taxes, or ownership disputes. It protects buyers from purchasing a home with legal or financial complications.

✅ How a Title Contingency Works

  • The title company performs a title search to check for liens, judgments, or ownership issues.
  • The buyer reviews the preliminary title report.
  • If issues are found, the seller must resolve them before closing.
  • If problems cannot be cleared, the buyer may cancel the sale without losing earnest money.
  • Lenders generally require a clean title before approving financing.

A title contingency protects the buyer from inheriting unpaid debts or legal ownership conflicts when purchasing a home.

💡 Why a Title Contingency Matters for FSBO Sellers

  • Ensures a clean transfer of ownership: Eliminates legal problems before closing.
  • Prevents delays: Title issues are a common cause of postponed closings.
  • Reduces disputes: Buyers feel secure knowing they’re not inheriting hidden liabilities.
  • Supports lender requirements: Most mortgages require clear title to fund.
  • Helps FSBO sellers prepare: Running a title search early can prevent last-minute surprises.

📍 FSBO Tip: Order Your Title Work Early

A title contingency is usually straightforward—unless the seller is unaware of an old lien, property line dispute, or unpaid taxes. FSBO sellers can avoid delays by ordering a preliminary title search early in the listing process.

Your title company can also help provide title insurance, resolve issues, and prepare closing documents.

Looking for more real estate terms? Visit our Real Estate Dictionary.

Ready to Sell Your Home FSBO?

List your home on the MLS without paying a 3% listing agent commission. Get maximum exposure on Zillow, Realtor.com, and hundreds of IDX sites.

View Flat Fee MLS Plans →