Writing an offer in San Francisco and wondering which contingencies to include? You are not alone. In a fast-moving market, you want protection without losing out to a cleaner offer. This guide breaks down the key contingencies, typical SF timelines, seasonal strategies, and the smart trade-offs to consider before you sign. Let’s dive in.
What contingencies are and why they matter
Contingencies are contract conditions that must be met for your purchase to proceed. They protect you from unexpected problems, financing shortfalls, or legal issues. Sellers prefer fewer and shorter contingencies because they reduce the risk of delay or cancellation.
In California, standard forms define how contingencies work, the timelines to remove them, and what happens if they are not met. In San Francisco, offer strength often comes down to which contingencies you keep, shorten, or waive.
The most common SF contingencies
Inspection contingency
- Purpose: Lets you complete professional inspections, negotiate repairs or credits, or cancel if significant issues arise.
- Scope: General home inspection, plus targeted checks like roof, HVAC, plumbing, electrical, and a separate pest/wood-destroying organism (WDO) inspection.
- SF specifics: Many homes are older. Inspectors often look for seismic retrofit needs, foundation or settlement issues, knob-and-tube wiring, lead paint, asbestos in finishes, and aging plumbing. Many listings are offered “as-is.” You still retain inspection rights unless you waive the contingency.
Appraisal contingency
- Purpose: Protects you if the lender’s appraisal comes in below the purchase price, which can create a funding gap.
- SF specifics: Unique or hot properties can attract prices above recent comparable sales. Buyers sometimes use an appraisal gap clause, agreeing to cover a set amount above the appraised value.
- Options: Keep a full appraisal contingency, or use appraisal-gap coverage if you can bring extra cash if needed.
Loan (financing) contingency
- Purpose: Covers you if your lender does not approve the loan by a certain date.
- SF specifics: Strong offers include a full pre-approval and sometimes show that underwriting is already underway to reduce perceived risk for the seller.
HOA/condo document review contingency
- Purpose: Gives you time to review HOA bylaws, CC&Rs, financials, reserve studies, insurance coverage, and any litigation.
- SF specifics: In condos and TICs, document review can reveal special assessments or reserve shortfalls that affect your budget and risk.
Title contingency
- Purpose: Confirms clean, marketable title free of undisclosed liens or encumbrances.
- SF specifics: Older properties can have complex histories, easements, or recorded interests. You will review a preliminary title report and obtain title insurance during escrow.
Pest/WDO contingency
- Purpose: Allows a licensed inspection for termites and other wood-destroying organisms and gives you a path to request treatment or a credit.
Home sale contingency
- Purpose: Makes your purchase dependent on selling your current home.
- SF specifics: Rarely accepted in multiple-offer situations. More possible in off-peak periods or on properties with softer demand.
Insurance contingency
- Purpose: Lets you cancel if you cannot secure homeowners insurance or, if desired, earthquake or flood coverage at a reasonable cost.
- SF specifics: Earthquake risk is a local factor. Lenders typically do not require separate earthquake policies, but the cost can influence your decision.
Other protections and disclosures
- Sellers provide required California disclosures for your review. For condos, pay attention to reserves, rental policies, and litigation status.
Typical SF timelines and “local practice”
Timelines are negotiable, but here is what you often see in San Francisco. Always confirm dates in your contract.
- Inspection contingency: commonly 7-17 days from acceptance; 10-17 days can allow follow-up specialist visits.
- Loan/financing contingency: commonly 17-21 days for loan approval and removal.
- Appraisal: usually ordered right away and returned within 7-14 days, often tied to the loan contingency timeline.
- HOA/condo document review: often 5-10 days.
- Close of escrow: typically 30-45 days with financing; cash can close in 7-14 days.
- Earnest money deposit: usually due within 3 business days after acceptance, with the exact amount and timing set in the contract.
The “17-day” window appears often because it helps align inspections, appraisal, and underwriting in a tight schedule. It is a convention, not a rule.
Seasonality: winter vs spring strategy
San Francisco’s market tempo shifts with the seasons, and your contingency plan should adjust too.
- Winter: Fewer listings and buyers. You may be able to keep more protections and use longer removal periods.
- Spring: More listings and more competition. Sellers often favor offers with shorter or waived contingencies and strong financing proof.
Competitive tactics and trade-offs
You can strengthen your position without taking on unnecessary risk by choosing targeted strategies.
- Shorten timelines, keep protections: Offer 5-10 days for inspections or 14-17 days for loan approval to reduce seller anxiety while preserving your escape routes.
- Appraisal planning: If you expect competition, consider an appraisal-gap clause with a firm cap you are comfortable covering.
- Financing strength: Provide a full pre-approval and, if possible, evidence of underwriting progress. Cash or large down payments can improve terms.
- Deposit signals: A meaningful earnest money deposit shows commitment. Understand your exposure if you default.
When to be cautious about waivers
There are times when keeping contingencies is the safer path.
- Older homes with potential structural, seismic, or major system issues.
- Properties with few comparable sales, which increases appraisal risk.
- Budgets stretched thin, where a low appraisal or major repair could create hardship.
- Condos with warning signs in HOA documents, such as reserve shortfalls, special assessments, or litigation.
Red flags to take seriously
- Missing or incomplete seller disclosures.
- Notices of violations, liens, or legal disputes affecting title or the HOA.
- Visible deferred maintenance, water intrusion, pest damage, or foundation movement.
The right experts at the right time
A strong team helps you move fast without missing key risks.
- Lender or mortgage broker: Secure a solid pre-approval and, if possible, pre-underwriting or a conditional commitment.
- Inspectors: Line up a general inspector and be ready to call specialists for foundation, roof, HVAC, plumbing, electrical, pest/WDO, or a sewer scope.
- Title and escrow: Review the preliminary title report and confirm deposit logistics and closing steps.
- HOA specialist or attorney: For complex condo associations, reserve questions, or litigation.
- Real estate attorney: For unusual clauses, creative structures, or title complications.
Offer prep checklist
Use this quick list before you write.
- Get a current pre-approval and your lender’s direct contact info.
- Assemble proof of funds for your deposit and down payment.
- Decide which contingencies you will keep, shorten, or waive, and set a clear appraisal-gap limit if you plan to include one.
- Identify inspectors who can schedule quickly within your target window.
- Review seller disclosures as soon as available and escalate issues to the right expert.
Sample playbooks
Winter playbook
- Keep inspection and loan contingencies with practical timelines, such as 10-17 days for inspections and 17-21 days for loan.
- Keep appraisal protection unless your lender and comps support a higher price with confidence.
- Negotiate repairs or credits if inspections reveal material issues.
Spring playbook
- Shorten timelines to remain competitive, like 7-10 days for inspections and 14-17 days for loan, if your team can move quickly.
- Consider an appraisal-gap clause with a firm cap, backed by proof of funds.
- Maintain inspection rights if the property is older or complex, even if you limit repair requests.
Buying in San Francisco rewards preparation. With the right mix of contingencies and a fast, organized process, you can protect yourself and still write a winning offer. If you want a local partner who understands neighborhood nuances, older-home risks, and condo documents, let’s talk. Schedule a free neighborhood consultation with Michael Soon and move forward with confidence.
FAQs
What is an inspection contingency in San Francisco offers?
- It gives you time to inspect the home, request repairs or credits, or cancel if significant issues are found, which is especially important for older SF properties.
How long do you have to remove contingencies in SF?
- Common practice is 7-17 days for inspections, 17-21 days for loan and appraisal, and 5-10 days for HOA review, but all timelines are negotiable in your contract.
What if a condo’s HOA documents raise concerns?
- You can use the HOA review period to assess reserves, assessments, and litigation; serious issues may lead to negotiation or cancellation while the contingency is active.
What happens if the appraisal is low in San Francisco?
- You can renegotiate price, bring extra cash, use an appraisal-gap clause if included, or cancel if you kept a full appraisal contingency.
Is a home sale contingency realistic in SF right now?
- It is rarely accepted in multiple-offer situations; it may be possible in off-peak seasons or for properties with lower demand.
