What are contingencies in a home purchase offer?

Contingencies are conditions in your contract that must be met or you can exit without losing your earnest money. The common ones are the financing contingency (your loan must be approved), the appraisal contingency (the home must appraise at or near the price), the inspection contingency (you can renegotiate or walk after the inspection), and sometimes a home-sale contingency (your purchase depends on selling your current home). They protect you, but each one makes your offer slightly less attractive to sellers, especially in bidding wars. Waiving a contingency can win the deal but exposes you to real financial risk – never waive the financing or appraisal contingency unless you can cover the gap in cash. Match the contingencies you keep to the risks you actually can't absorb.