Most buyers request the right to send in a pest inspector and a general contractor. If the house is old, in poor condition, or in a region known for mudslides, floods, mold, toxic substances, or earthquakes, you might also want to do more specialized inspections.

If you're buying a newly constructed house, you may want to schedule inspections during key phases of construction, plus a final inspection when the house is completed.

Inspection reports will inevitably reveal some problems. Normally, you and the seller will agree on how much the seller will pay or reimburse you for in order to fix these problems. However, a seller who feels you've underpaid may say "take it or leave it" -- and refuse to pay for any of the repairs. And buyers who've gotten buyers' remorse have been known to claim that a minor repair issue provides grounds to cancel the deal.

Insurance Contingency

Your lender will probably require you to buy homeowners' insurance. But what if you live in a state where not everyone is able to find coverage? In recent years, many homeowners living in states with a history of household toxic mold, earthquakes, or hurricanes, have been surprised to receive a flat out "no" from the insurance carriers. To protect yourself from this possibility, make your contract contingent on your applying, and receiving a commitment in writing, for homeowners' insurance.

Title Contingency

This contingency has to do with making sure the seller has clear "title" to (ownership of) the property. Believe it or not, more than a few renters and squatters have attempted to sell the house in which they're living. That's the extreme case, but even so, title to the property may not be as clean as you or even the seller realize. There can be "clouds" on the title (due to divorce, contested wills, or tax liens by the county government) that call the seller's right to full ownership into question.

That's why your contract should include a contingency saying that you must receive and approve a preliminary title report (done by a title company). The title company will research the chain of ownership, and also tell you whether others have any right to use the property (for example, to walk through it or drill on it for natural resources.)

Next Steps

Put your contingencies in writing, as part of your offer on the house.