Writing an offer in San Jose can feel like a high-stakes puzzle. You want to win the home, but you also want protection if financing, appraisal, or inspections do not go as planned. You are not alone. Many South Bay buyers struggle to balance risk and reward with contingencies.
This guide explains the key contingencies you will see in San Jose contracts, common timelines, and practical strategies to stay competitive without overexposing yourself. You will learn what each contingency does, how it affects your offer strength, and how to choose the right approach for your goals. Let’s dive in.
What contingencies do
A contingency is a condition in your purchase contract that must be satisfied before you are required to close. If the condition is not met by the deadline, you can usually cancel and recover your deposit as allowed in the agreement. In San Jose, most buyers focus on financing, appraisal, and inspection contingencies.
California agents commonly use standard CAR forms that spell out these protections and the dates to remove them. Those dates are negotiated. If a contingency is not satisfied or removed by the deadline, you can request an extension, remove it, or cancel per the contract.
Sellers in California must also provide required disclosures. You should still complete your own inspections and review public records. In San Jose, that often includes checking City of San Jose permits and Santa Clara County records when questions arise about past work.
Financing contingency
What it protects
A financing or loan contingency protects you if your lender does not approve the agreed loan by the deadline. If you cannot obtain the specified loan type or amount, you can cancel within the terms of the contract and recover your deposit.
Typical timeline in San Jose
The full loan process often runs 30 to 45 days from application to funding, but the contingency deadline is usually earlier. In many South Bay deals, buyers and sellers negotiate loan contingency removal somewhere in the 14 to 30 day range. Strong offers pair shorter periods with solid lender documentation.
How to compete
- Get pre-approval or, better, pre-underwriting from your lender before you write.
- Use a larger down payment or show cash reserves to reduce perceived risk.
- Set a realistic removal date only after confirming your lender’s timeline.
- If you are buying and selling, discuss bridge options with your lender early.
Risks to weigh
Shortening or waiving your loan contingency may help you win, but it raises your financial risk. If financing later falls through and you removed your contingency, you could lose your deposit or be in breach. Know what counts as a valid denial under your contract before you decide.
Appraisal contingency
How it works
Most loans require an appraisal. If the appraisal comes in below the purchase price, your lender bases the loan on the appraised value. Without an appraisal contingency, you would need to bring the difference in cash or find another solution.
Timelines
Appraisals are often ordered right after offer acceptance and come back within about 7 to 14 days, depending on availability. In practice, many buyers align the appraisal contingency removal with the loan contingency timeline.
Handling a low appraisal
If the appraisal is low, you and the seller have options:
- You add cash to cover the gap.
- The seller reduces the price.
- You renegotiate to meet in the middle.
- You cancel if your appraisal contingency allows it.
Competitive strategies
- Use a capped appraisal gap clause that states how much extra cash you will bring if the value is short. This limits your exposure while keeping your offer attractive.
- Only waive the appraisal contingency if you can truly cover a potential gap.
- For all-cash offers, consider still getting a valuation to confirm price and resale risk.
Inspection contingency
What you can inspect
The inspection, or “investigation,” contingency gives you the right to inspect the home and request repairs, credits, or cancel within the agreed period. In San Jose and nearby South Bay neighborhoods, buyers commonly order:
- General home inspection
- Termite and dry-rot inspection
- Roof evaluation
- Foundation or structural assessment
- Sewer lateral scope
- HVAC and water heater checks
- Specialty tests as needed, such as mold, lead-based paint for pre-1978 homes, asbestos, chimney, pool, or geotechnical reviews
Timing and repair requests
Inspection windows in competitive markets are often 7 to 17 days. After inspections, you can request repairs or credits. The seller can accept, counter, or decline. If you cannot reach agreement and your contingency is still in place, you can cancel within the contract terms.
Disclosures and permits in San Jose
California requires sellers to provide disclosures, but these do not replace inspections. Cross-check disclosures with City of San Jose permit records and Santa Clara County documents if you suspect unpermitted work. Resolving unpermitted items can be costly.
Older home considerations
In Willow Glen and other older San Jose neighborhoods, you may encounter older wiring, aging plumbing, or signs of foundation settlement. Termite and dry-rot items are also common in California. Plan for focused inspections when the home’s age or materials suggest added risk.
Balancing risk and strength
In many San Jose submarkets, sellers favor offers with fewer or shorter contingencies, strong financing evidence, larger earnest money, and faster closes. You need to balance that pressure with your need for protection.
Smart ways to compete while managing risk include:
- Strengthen financing with pre-underwriting and clear proof of funds.
- Shorten, but do not eliminate, your contingency timelines when feasible.
- Use a capped appraisal gap instead of a full waiver.
- Pre-schedule inspectors so you can move quickly after acceptance.
- Consider higher earnest money if you are comfortable with the deposit exposure.
Sample timeline
Here are common ranges in South Bay purchases. Your contract dates will be negotiated.
- Inspection period: 7 to 17 days after acceptance
- Appraisal completion: 7 to 14 days after order
- Loan contingency removal: 14 to 30 days after acceptance
- Close of escrow: often 30 to 45 days from acceptance
Quick buyer checklist
- Secure a strong pre-approval and ask your lender about pre-underwriting.
- Line up general, termite, and sewer inspectors in advance.
- Decide how much appraisal gap, if any, you are willing to cover.
- Set realistic contingency dates based on lender and inspector availability.
- Review seller disclosures quickly and check permit history if anything looks unclear.
- Keep communication tight with your agent, lender, inspector, and escrow.
Common mistakes to avoid
- Waiving loan or inspection protections without understanding deposit risk.
- Choosing unrealistic dates that your lender or inspectors cannot meet.
- Skipping a sewer scope or termite inspection on older homes.
- Ignoring unpermitted work signals in disclosures or public records.
- Confusing contingency removal with satisfaction. Removing a contingency usually waives your right to cancel for that issue later.
Ready to plan your offer?
You do not have to choose between protection and competitiveness. With the right timelines, documentation, and a smart appraisal strategy, you can write an offer that stands out and still safeguards your interests. If you want local guidance tailored to Willow Glen and the South Bay, connect with Kendra Gaeta and Lindsay Morris for a clear plan and calm execution.
FAQs
How long do San Jose buyers usually get for inspections?
- Inspection windows are negotiated, but many South Bay buyers use about 7 to 17 days, depending on inspector availability and market pressure.
What happens if the appraisal is lower than my offer price?
- You can add cash, ask the seller to reduce price, renegotiate a split, seek lender options, or cancel if you kept an appraisal contingency.
Should I waive contingencies to win in Willow Glen?
- Only if you accept the financial risk. Safer tactics include shorter timelines, stronger lender documentation, and capped appraisal gap clauses.
Can a seller force me to remove contingencies?
- No. Deadlines are negotiated. Sellers can request removal, but you control your rights under the contract unless you have already agreed to remove them.
Do I get my deposit back if I cancel within a contingency period?
- If you cancel under a valid contingency within the agreed timeline, you typically recover your deposit per California contract terms.
