By Prerna Kapoor, CLHMS | REAL Brokerage | April 24, 2026
Here’s something I see all the time: a buyer falls in love with a home, writes an offer, and then agonizes over which contingencies to include. Should they waive the inspection? Keep the appraisal contingency? What about financing?
I get it. In a market where you’re competing with other offers, it feels like every contingency you add makes your offer weaker. But here’s the thing – contingencies exist to protect you. And waiving the wrong one can cost you tens of thousands of dollars.
Let me walk you through how contingencies actually work in Colorado, and when it might make sense to adjust them.
What Are Home Buying Contingencies, Exactly?
A contingency is a condition built into your purchase contract that must be met before the sale moves forward. If the condition isn’t met, you can back out of the deal and typically get your earnest money back. In Colorado, the standard contract (CBS1-6-24) includes several built-in contingency deadlines that both parties agree to.
The three most common contingencies are inspection, appraisal, and financing. Each one serves a different purpose, and understanding them gives you real negotiating power.
The Inspection Contingency: Your Biggest Safety Net
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This one lets you hire a home inspector to evaluate the property’s condition. In Colorado, you typically have 10 to 14 days to complete the inspection and negotiate repairs or credits with the seller. According to the National Association of Realtors, about 86% of home buyers include an inspection contingency in their contract.
Should you ever waive it? Honestly, I’d say no in almost every situation. Colorado homes deal with specific issues – radon levels that can exceed the EPA’s 4.0 pCi/L action level, foundation settling from our expansive clay soils, and aging sewer lines in older neighborhoods. These aren’t cosmetic problems. They’re $5,000 to $30,000 repairs.
If you’re tempted to waive because the market feels competitive, consider a pre-inspection instead. You pay for an inspection before submitting your offer, so you know what you’re getting into. It costs around $400 to $600 but eliminates the seller’s worry about your contingency killing the deal.
The Appraisal Contingency: Protecting Your Investment
The appraisal contingency says you can renegotiate or walk away if the home appraises for less than the purchase price. Your lender won’t fund a loan for more than the appraised value, so this contingency matters a lot when prices are shifting.
Right now in Colorado’s balanced market, the median home price in the Denver metro sits around $615,000. With inventory at roughly 3.2 months of supply, homes are generally appraising close to their list prices. But I still see appraisal gaps on properties that have been updated or are in high-demand pockets like Parker and Castle Pines.
If you’re making an offer above list price, think carefully about whether you’re prepared to cover an appraisal gap out of pocket. Some buyers include an “appraisal gap clause” – agreeing to cover up to a certain dollar amount if the appraisal comes in low. That shows the seller you’re serious without giving up all your protection.
The Financing Contingency: Don’t Skip This Unless You’re Paying Cash
This one protects you if your mortgage falls through for any reason – a job change, a credit issue that pops up, or an underwriting snag. Without it, you could lose your earnest money (usually 1% to 2% of the purchase price in Colorado) if your loan doesn’t close.
I’ve seen buyers waive this to compete with cash offers. That’s a risky move. Unless your lender has fully underwritten your loan and you have significant reserves, keep this contingency in place. Colorado’s standard contract gives you until 4 to 7 days before closing to secure your financing.
When Adjusting Contingencies Actually Makes Sense
There are situations where shortening deadlines or modifying contingencies can strengthen your offer without putting you at risk. For example, if you’ve already been fully underwritten and just need the appraisal, you can confidently shorten your financing deadline. Or if the home was recently inspected and you’ve reviewed the report, a shorter inspection period shows you’re serious.
The key is knowing the difference between waiving a contingency and adjusting its timeline. Shortening a deadline from 14 days to 7 days shows good faith. Removing the contingency entirely means you’re agreeing to move forward no matter what – and that’s a much bigger decision.
If you’re thinking about buying in Colorado and want to talk through what makes sense for your situation, I’m always happy to help you think it through. No pressure, just a conversation about what works for you.
Prerna Kapoor | REALTOR® | Luxury Home Specialist
REAL Brokerage | 720-949-5450 | info@prernakapoor.com
CLHMS • RENE • PSA • ABR | International Sterling Society Award Winner
Prerna specializes in residential real estate across Parker, Aurora, Lone Tree, Castle Pines, Highlands Ranch, Cherry Creek, Greenwood Village, and Centennial. She speaks English, Japanese, and Hindi.
