How can contingencies protect a buyer’s earnest deposit? Today we’ll be addressing this question in the latest installment of our “Ask a Realtor” series.


Welcome back to our “Ask a Realtor” series. For today’s installment, we’ve brought on Tom and Cindy Ralston from Lyon Real Estate to discuss their experience in the industry.

To start off, we asked them to address an important question: “How can earnest money deposits be protected with contingencies?

Before answering this question, it’s important to note that there are three common contingencies we often observe in contracts: the buyer inspection contingency, the appraisal contingency, and the loan contingency. These contingencies all help protect the earnest deposit. They ensure that if anything happens to jeopardize the deal, the buyer can still back out and have their deposit refunded.

Now let’s take a closer look at each of these contingencies, individually. We’ll discuss the buyer inspection contingency first.

In most transactions, buyers have 17 days to complete any inspections on the home. This usually involves ordering a general home inspection, as well as any specialized inspections like termite or roof inspections. Buyers have the opportunity during this period to have nearly any aspect of the property inspected.

“Contingencies ensure that if anything happens to jeopardize the deal, the buyer can still back out and have their deposit refunded.”

Next, there’s the matter of the appraisal contingency. The appraisal period usually lasts between 17 and 21 days, which is a similar time frame to loan or finance contingencies. While inspections verify quality, appraisals verify value. If an issue arises during any of these processes, the buyer may cancel the contract. And assuming the cancellation is fair and doesn’t breach the terms of the contract, the buyer will be able to get their earnest money back.

If you have any other questions for either of today’s special guests, you can reach them by phone or email. You can give Tom a call at (916) 849-1090 or email him at Or you can call Cindy at (916) 715-6899, or send her an email at

And, as always, if you have any other questions or would like more information from us, feel free to give us a call or send us an email. We look forward to hearing from you soon.