A contingency is a condition that has to be met for a contract to move forward. If the condition isn't met, the buyer typically has the right to cancel and recover their deposit — assuming they acted in good faith. Not every contingency is standard, not every deal has all of them, and several that are common in other states rarely appear in New York City. Here's what you'll actually encounter.
A financing contingency protects the buyer if they're unable to obtain a mortgage on the terms required by the contract. If the buyer makes a genuine, good-faith effort to secure financing and comes up empty, they can back out and recover their deposit. This is the most common contingency in NYC deals — and in many cases it's the only one. A lot of the issues that contingencies handle elsewhere (inspections, title) are addressed in New York before the contract is ever signed.
This is usually a subset of the financing contingency rather than a standalone clause. It protects a buyer who gets approved for a mortgage — just not for enough. Getting approved isn't the same as getting approved for the right amount, and without this language, a buyer could technically satisfy the financing contingency while still being unable to close.
An appraisal contingency protects the buyer if the property appraises for less than the contract price. Lenders base their loan on the lower of the purchase price or the appraised value — so a low appraisal can create a financing gap even when approval was never in question.
In most states, an inspection happens after the contract is signed. In New York City, it almost always happens before. Once an offer is accepted, buyers typically schedule a second showing with an inspector before the attorneys finalize the contract. If something significant comes up, the buyer can renegotiate the price, ask the seller to address repairs, or walk away — all before putting ink on paper. Because that process resolves inspection issues pre-contract, a formal inspection contingency clause often isn't necessary and rarely appears in NYC agreements.
Standard NYC purchase contracts already require the seller to deliver clear, marketable title at closing. That protection is baked in — it doesn't need to be negotiated separately as a contingency the way it might in other states. Your attorney will run a title search, and title insurance will cover any issues that surface after closing. This one essentially takes care of itself in the typical NYC deal.
A sale contingency lets a buyer back out if they're unable to sell their current home first. Most NYC sellers won't touch it. It introduces uncertainty on top of uncertainty: now the seller is dependent on the buyer finding their own buyer, on a timeline no one can predict. In a competitive market, a seller with multiple interested parties has no reason to accept that risk. You'll occasionally see it in a very soft market or with an unusually strong buyer, but it's the exception.
The bottom line
Most NYC deals come down to one real contingency: financing. The appraisal and minimum loan amount protections are usually folded into that same clause. Inspection issues get resolved before the contract is signed. Title is searched after signing, but the standard NYC contract already requires the seller to deliver clear title at closing — so a separate contingency isn't needed. And sale contingencies almost never get accepted.
That's actually one of the ways NYC real estate moves faster than buyers expect. By the time you sign a contract here, most of the contingency work is already done. What's left is getting your loan to close — and that's where your attorney, your lender, and your broker all have to be coordinated and moving together.
Quick Reference
Most common in NYC
Financing contingency — the main event. Usually covers loan approval, minimum loan amount, and appraisal in one clause.
Financing can include
Minimum loan amount
Appraisal contingency
Rarely needed in NYC
Inspection contingency — handled pre-contract
Title contingency — covered by standard contract language
Sale contingency — sellers almost never accept it
Key difference vs. other states
In NYC, inspections happen before the contract is signed. Title is searched after — but clear title is already required by the standard contract, so a separate contingency isn't needed.
Have questions about what contingencies make sense for your specific deal? I'm happy to walk through it.
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