By The Rebecca Francis Team
One of the questions we get most often from buyers — especially first-time buyers in the Lehigh Valley — is what happens after an offer gets accepted. For most people, it is a moment of genuine excitement. But the period between accepted offer and settlement is shaped significantly by the contingencies written into the contract, and understanding what they mean for you makes an enormous difference in how confidently you navigate that stretch. As a team that works in this market every day, we want to walk you through how contingencies actually work and how to think about them strategically.
Key Takeaways
-
Contingencies are conditions written into a purchase agreement that must be met for the sale to move forward — they protect buyers and, in some cases, sellers
-
Pennsylvania's Standard Agreement for the Sale of Real Estate includes several built-in contingencies; understanding each one matters before you sign
-
In Lehigh Valley's competitive market, buyers must balance protecting themselves with keeping offers attractive
-
Most contingency periods run simultaneously, with all paths converging toward a single settlement date
What a Contingency Actually Is
A contingency is a specific condition that must be satisfied before a real estate transaction is completed. If the condition is not met, the buyer can typically terminate the agreement and receive their deposit — called earnest money in Pennsylvania — back without penalty. If the buyer backs out after contingency periods have expired without a valid reason, that deposit is at risk.
In Pennsylvania, most residential transactions use the Standard Agreement for the Sale of Real Estate developed by the Pennsylvania Association of Realtors. This form includes several built-in contingencies that are already there when both parties sign. The language in these agreements is enforceable as written, which is why it is worth understanding exactly what each contingency does before your signature is on the contract. Real estate attorneys in Pennsylvania often review and negotiate contingency terms, and for luxury or complex transactions, their involvement is particularly valuable.
In Pennsylvania, most residential transactions use the Standard Agreement for the Sale of Real Estate developed by the Pennsylvania Association of Realtors. This form includes several built-in contingencies that are already there when both parties sign. The language in these agreements is enforceable as written, which is why it is worth understanding exactly what each contingency does before your signature is on the contract. Real estate attorneys in Pennsylvania often review and negotiate contingency terms, and for luxury or complex transactions, their involvement is particularly valuable.
The core function of contingencies in Pennsylvania real estate:
-
They establish specific conditions that must be met before the sale closes
-
They define time periods within which those conditions must be evaluated and resolved
-
They determine what happens to the earnest money deposit if a buyer exercises a contingency and terminates
-
They create a structured negotiation process when issues arise — particularly during inspections — rather than allowing either party to walk away freely
The Inspection Contingency: The Most Common and Most Important
The inspection contingency gives the buyer the right to have the property professionally evaluated by a third-party inspector during a defined period, typically written into the contract. The inspector reviews structural integrity, roofing, electrical, plumbing, HVAC, water intrusion, and pest infestation, among other physical conditions. In properties across the Lehigh Valley and in the Upper Saucon or Lower Saucon townships, specialized inspections for radon — which can be a concern in this part of Pennsylvania — are often included as well.
If the inspection reveals significant issues, the buyer can submit a written corrective proposal to the seller during the contingency period. After that proposal is submitted, Pennsylvania's standard form provides a five-day negotiation period during which both parties work toward resolution. If no agreement is reached after the negotiation period, the buyer has two additional days to decide whether to terminate. It is worth noting that once a buyer submits a corrective proposal, they cannot simply walk away freely during the negotiation period — the process is designed to give both parties time to actually resolve things. Missing any of these deadlines can waive protections, which is why tracking timelines carefully with your agent is essential.
If the inspection reveals significant issues, the buyer can submit a written corrective proposal to the seller during the contingency period. After that proposal is submitted, Pennsylvania's standard form provides a five-day negotiation period during which both parties work toward resolution. If no agreement is reached after the negotiation period, the buyer has two additional days to decide whether to terminate. It is worth noting that once a buyer submits a corrective proposal, they cannot simply walk away freely during the negotiation period — the process is designed to give both parties time to actually resolve things. Missing any of these deadlines can waive protections, which is why tracking timelines carefully with your agent is essential.
What the inspection contingency covers and what to know:
-
Standard inspection: structural integrity, roofing, electrical, plumbing, HVAC, and visible physical conditions
-
Radon testing: common and important in Lehigh County and surrounding areas; if levels exceed 4.0 pCi/L, mitigation may be negotiated
-
Septic and well inspections: for properties in more rural parts of Upper Saucon or Lower Saucon not connected to public utilities
-
Timeline: the contingency period, followed by a five-day negotiation period, followed by a two-day termination window — all as written in the contract
The Financing Contingency: What Happens If the Loan Falls Through
The financing contingency, sometimes called the mortgage or loan contingency, protects buyers in the event they cannot secure their mortgage by a specified date. Even buyers who are pre-approved before making an offer still go through full underwriting once a specific property is under contract, and that process can surface issues that affect the loan. The financing contingency provides an exit and a return of the deposit if the loan cannot be finalized within the agreed timeframe.
In Lehigh Valley's market — where homes are selling in 30 to 60 days on average and multiple offers are common for desirable properties — buyers sometimes shorten financing contingency periods to make their offers more competitive. This can work when the buyer has strong lender relationships and a thorough pre-approval. But shortening this timeline meaningfully increases risk if anything in the underwriting process slows down, so the decision should be made thoughtfully and with your agent's input.
In Lehigh Valley's market — where homes are selling in 30 to 60 days on average and multiple offers are common for desirable properties — buyers sometimes shorten financing contingency periods to make their offers more competitive. This can work when the buyer has strong lender relationships and a thorough pre-approval. But shortening this timeline meaningfully increases risk if anything in the underwriting process slows down, so the decision should be made thoughtfully and with your agent's input.
What buyers should understand about the financing contingency:
-
The contingency gives 30 to 60 days, typically, to finalize the loan — the exact period is negotiated in the contract
-
Pre-approval is not the same as final loan approval; underwriting can surface issues that affect the outcome
-
Jumbo financing, which applies to many luxury transactions in the Lehigh Valley, may have different timelines and requirements than conventional loans
-
Waiving this contingency makes an offer significantly more competitive but transfers all financing risk to the buyer
The Appraisal Contingency
When a buyer is financing their purchase, the lender orders an appraisal to confirm the property's fair market value. If the appraisal comes in below the agreed purchase price, the lender will typically not finance the gap — meaning the buyer would have to make up the difference in cash, ask the seller to reduce the price, or walk away. The appraisal contingency gives the buyer a defined path for each of these options.
In Lehigh Valley's current market, where competition for well-priced homes can drive offers above asking, appraisal gaps are a real consideration. Some buyers, particularly those purchasing luxury properties in communities like Valley Green, Weyhill Woods, or Blue Ridge Estates in Upper Saucon, include appraisal gap coverage — a commitment to pay a specified amount above the appraised value — as a way to strengthen their offer. This is a sophisticated negotiating tool that works when the buyer has sufficient cash reserves to cover a potential gap.
In Lehigh Valley's current market, where competition for well-priced homes can drive offers above asking, appraisal gaps are a real consideration. Some buyers, particularly those purchasing luxury properties in communities like Valley Green, Weyhill Woods, or Blue Ridge Estates in Upper Saucon, include appraisal gap coverage — a commitment to pay a specified amount above the appraised value — as a way to strengthen their offer. This is a sophisticated negotiating tool that works when the buyer has sufficient cash reserves to cover a potential gap.
How appraisal contingencies work in practice:
-
If the appraisal comes in at or above the purchase price, the contingency is typically satisfied without issue
-
If it comes in below, the buyer can renegotiate, make up the difference, or terminate and recover their deposit
-
Waiving the appraisal contingency is more common with cash purchases or in very competitive situations where the buyer has resources to cover a gap
-
Your agent can help you review recent comparable sales before making an offer to assess the appraisal risk on a specific property
The Sale of Existing Home Contingency
Buyers who need proceeds from the sale of their current home to fund a new purchase sometimes request a sale contingency. This is the contingency most disliked by sellers because it introduces uncertainty into what otherwise might be a clean transaction. Pennsylvania has multiple forms covering this situation — including versions that allow the seller to continue marketing the property and potentially accept a better offer and terminate the current contract.
In Lehigh Valley's competitive market, a sale contingency can significantly weaken an offer. For buyers in this situation, bridge financing, aligning closing dates, or selling before beginning a search can all be more effective approaches than relying on a contingency that many sellers in this market will not accept.
In Lehigh Valley's competitive market, a sale contingency can significantly weaken an offer. For buyers in this situation, bridge financing, aligning closing dates, or selling before beginning a search can all be more effective approaches than relying on a contingency that many sellers in this market will not accept.
FAQs
Can I still look at a home that is listed as "contingent" in Lehigh Valley?
Yes — you can tour and even make a backup offer on a contingent property. However, keep in mind that the seller is typically contractually obligated to the existing buyer unless that buyer exercises a contingency and terminates. If the accepted offer falls through, the seller may be free to consider your offer. Your agent can find out the status of the contingencies and how much time remains on them.
How long do contingency periods typically run in Pennsylvania?
Inspection periods are negotiated in the contract and commonly run seven to fifteen days. Financing periods typically run 20 to 45 days. All contingency deadlines run toward the single agreed settlement date. Missing a deadline — even by a day — can waive a protection, so tracking these dates carefully with your agent from day one is essential.
Should buyers waive contingencies to be more competitive in the Lehigh Valley?
Sometimes — but only when the risk is genuinely manageable. Waiving the inspection contingency on a property with a known, clean history and a recent inspection is very different from waiving it on an older home with no disclosure history. We always help our buyers think through the specific risk profile of each property before recommending any contingency waiver, because the deposit and the purchase itself are both on the line.
Buy or Sell in the Lehigh Valley With The Rebecca Francis Team
Understanding contingencies is part of making smart decisions in this market — and we are here to walk you through every step of the process. Whether you are buying your first home or selling a luxury estate in Upper Saucon Township, our team brings the expertise and local knowledge to help you close with confidence.
Reach out to us to learn more about how we guide buyers and sellers through every step of a Lehigh Valley real estate transaction.
Reach out to us to learn more about how we guide buyers and sellers through every step of a Lehigh Valley real estate transaction.
