Understanding Real Estate Contingencies and How They Work

In real estate, the small print can carry big weight, especially when it comes to contingencies. Whether you're buying a ski-in chalet or selling a mountainside retreat, understanding what’s built into your contract can make or break the deal. That’s why understanding real estate contingencies is so important for anyone stepping into the Telluride market.

At its core, a contingency is a condition written into a real estate contract, something that must happen before the deal can fully move forward. Think of it as a safeguard: if the condition isn’t met, the buyer (and sometimes the seller) can walk away from the deal without penalty.

In a high-stakes market like Telluride, where properties often carry significant price tags and unique features, real estate contingencies are your way of making sure everything checks out before you're fully committed.

Telluride’s real estate market is dynamic, with seasonal demand shifts, competitive listings, and a wide range of property types, from slopeside condos to historic townhomes and secluded mountain getaways. That variety makes it especially important for both buyers and sellers to understand the function and impact of contingencies.

Buyers want protection: time to secure financing, complete inspections, or ensure the property appraises for the agreed price. Sellers, on the other hand, want a smooth transaction with minimal delays and surprises. Knowing how to write, review, and negotiate real estate contingencies can help both sides get to closing with fewer headaches.

Let’s break down the contingencies most commonly seen in Telluride real estate contracts:

This allows the buyer to hire a professional inspector and review the home's condition. If significant issues come up (like foundation cracks, outdated roofing, or water intrusion), the buyer can negotiate repairs, ask for credits, or walk away. In a mountain town like Telluride, where weather can be tough on homes, this contingency is especially valuable.

Also known as a mortgage contingency, this protects the buyer if they’re unable to secure the loan they need. If the financing falls through, the buyer can exit the deal without losing their earnest money. This is critical even in cash-rich markets, especially if a buyer is relying on a jumbo loan or financing tied to a second property.

If the home doesn’t appraise at or above the purchase price, the buyer can renegotiate or walk away. This matters in Telluride, where unique properties may be harder to appraise accurately, especially in rapidly shifting markets or for custom builds.

This ensures the seller has clear ownership and the legal right to sell the home. If issues like liens, disputes, or restrictions show up during the title review, this contingency allows the buyer to back out or request a resolution before proceeding.

This one’s trickier. It gives the buyer time to sell their existing property before committing to the purchase. In competitive markets like Telluride, sellers often view this as a weaker offer, but it can work in slower seasons or with the right timing.

Here’s the balance: contingencies offer protection, but they also add complexity (and sometimes hesitation) for the other party. If you're a buyer, too many contingencies can make your offer less attractive. If you're a seller, insisting on fewer contingencies could backfire if a deal falls apart later.

In Telluride’s more competitive seasons, especially leading up to ski season, strong offers with fewer contingencies often rise to the top. But that doesn’t mean waiving everything blindly. A smart buyer works with their agent to include only what’s essential, and a savvy seller knows which contingencies are reasonable and which could raise red flags.

Each contingency comes with its own timeline. For example, a buyer may have 7–10 days to complete a home inspection, 21 days to secure financing, or a specific date for the appraisal.

Missing those deadlines can put the deal at risk. On the flip side, moving too quickly might not leave enough time for due diligence. That’s where having a local expert comes in, someone like Eric Saunders, who understands how these timelines typically play out in the Telluride market and can keep things on track.

If a contingency isn’t satisfied by the deadline, the buyer (or seller) usually has the right to cancel the contract. For example, if the inspection reveals serious structural issues and the two sides can’t come to an agreement on repairs, the buyer can walk, and usually keep their earnest money.

Of course, not every hiccup means the deal is dead. Often, real estate contingencies lead to negotiation. Maybe the seller agrees to a credit for repairs, or the buyer moves forward despite a low appraisal. A skilled agent will help navigate those decisions based on your goals and risk tolerance.

Some contingencies are more common in mountain communities like Telluride. A few examples include:

• Short-Term Rental Review: Buyers may want a contingency tied to confirming whether short-term rentals are allowed, especially for investment properties.
• HOA Review: For condo buyers, a contingency might be added for reviewing the HOA’s financials, rules, or future assessments.
• Environmental or Land-Use Disclosures: Mountain properties sometimes require added due diligence on things like snow load requirements, avalanche zones, or easements.

These aren’t standard in every deal, but in Telluride, they come up often enough that buyers and sellers should be prepared to see (or request) them.

Whether you're buying or selling in Telluride, understanding contingencies is key to avoiding surprises and securing the best outcome. From inspection clauses to financing protections, every detail matters, and having the right guidance can make all the difference.

Eric Saunders offers the local expertise and contract savvy to help you navigate your next move with confidence. If you're ready for a seamless experience backed by clear advice and strategic insight, reach out today. Your Telluride real estate journey deserves nothing less than a smooth, informed path to the closing table.