Buying in San Jose can feel like a sprint. You hear about buyers waiving contingencies, paying over list, and closing fast. It is exciting, but it also raises real questions about risk. You want to compete, but you also want protection if something goes wrong.

In this guide, you will learn what the main contingencies are, how they work in San Jose, typical timelines, and smart ways to stay competitive without taking on unnecessary risk. You will also see practical offer strategies that buyers use here. Let’s dive in.

Contingencies 101: What they do

A contingency is a contract clause that must be satisfied before you are fully locked into the purchase. If the contingency is not met by the deadline and you follow the contract steps, you can usually cancel and recover your earnest money.

Inspection contingency

• Purpose: gives you time to inspect the home and review disclosures and HOA docs, then accept, negotiate repairs or credits, or cancel.
• What you do: schedule inspections fast, review reports, decide to proceed, negotiate, or cancel within the window.
• Effect: you can terminate for covered reasons during the period without losing your deposit if you meet the contract terms.
• Local practice: some buyers shorten this window or limit requests to major or hazardous items. Others keep full rights but move quickly.

Appraisal contingency

• Purpose: protects you if the lender’s appraisal comes in below the purchase price.
• If appraisal is low: you can renegotiate, bring extra cash, ask for a price reduction, or cancel if your contract allows. Some buyers use a capped appraisal-gap promise.
• Lender vs. buyer: the lender needs an appraisal to approve the loan. You rely on the contingency to avoid overpaying or scrambling for unexpected cash.

Loan contingency

• Purpose: allows you to cancel and recover your deposit if you cannot secure loan approval by the deadline.
• What’s required: pre-approval at offer is standard. Full approval or clear denial must come within the contingency period.
• Risk if waived: if financing fails after you waive this, you may still be obligated to close or risk losing your earnest money, depending on contract terms.

Sale-of-home contingency

• Purpose: lets you make your purchase contingent on selling your current home.
• Variations: contingent on an accepted contract is shorter and less protective; contingent on closed escrow is longer and stronger.
• San Jose reality: sellers often avoid these in competitive listings or require strict proof and tight timelines.

Other items to review

• Title review, HOA documents, and required seller disclosures are part of your diligence. In California, you will receive statutory disclosures that you should review promptly during your contingency period.

How San Jose norms affect your offer

San Jose is part of Silicon Valley, where demand is strong and inventory can be tight. Many listings attract multiple offers. In that setting, sellers prefer offers that feel certain and quick. That is why you will see buyers shorten or even waive some contingencies, increase earnest money, and show strong proof of funds.

This does not mean you must waive protections. It means you should tailor your approach to the property and your capacity. Clean terms matter, but so does your safety net. The right mix depends on your financing, the home’s condition, and how competitive the listing is.

Typical San Jose contingency timelines

Contract deadlines are negotiable, but here are common ranges seen in local practice:

• Inspection: about 5 to 10 calendar days is typical in competitive offers. Some buyers try for 3 to 5 days. Others secure 10 to 14 days when possible.
• Appraisal: often set to the same date as the loan contingency, commonly 17 to 21 days.
• Loan: commonly 17 to 21 days, sometimes up to 21 to 24 days depending on underwriting.
• Sale-of-home: often 30 to 60 days, though many sellers will not accept this contingency in hot listings.

Use these only as planning benchmarks. Choose timelines that match your lender’s speed and your inspection scheduling.

Risks of shortening or waiving

Shortening or waiving contingencies can help you win, but it raises risk. Be clear-eyed about the trade-offs:

• Earnest money exposure: you could lose your deposit if you miss a deadline or default after waiving a key contingency.
• Low appraisal: if you waive appraisal and the value comes in low, you might need to bring extra cash to close.
• Hidden defects: if you waive inspection, you reduce your ability to exit if major issues appear later. Disclosure violations can still create remedies, but those disputes are fact-specific and can be complex.
• Loan denial: without a loan contingency, you may still be obligated to close even if your lender declines.

Smart ways to stay competitive and protected

You can often improve your odds without fully giving up safety. Consider these tactics:

• Get a strong pre-approval, ideally with documentation reviewed and a clear path to final approval.
• Provide proof of funds with your offer and consider a larger earnest money deposit.
• Schedule inspections within 24 to 48 hours of acceptance. Line up inspectors in advance so you can keep a short window.
• Use limited waivers. Examples: keep inspection but cap repair requests, shorten timelines instead of waiving, or use an appraisal-gap cap that limits your out-of-pocket exposure.
• Match your deadlines to real capacity. Do not promise a 17-day loan approval if your lender needs 24 days.

When to keep each contingency

• Inspection: keep it if the home is older, shows deferred maintenance, or you lack construction experience. A short window still gives you a safety check.
• Appraisal: keep it if you need financing and do not have spare cash to cover a potential gap.
• Loan: keep it if your loan is not fully vetted or involves complex income or assets.
• Sale-of-home: keep it if you truly need your proceeds. Expect pushback on competitive listings and prepare proof that your sale is moving.

Offer strategy examples you can discuss

• Competitive but safer: 5 to 7 day inspection, 17 to 21 day loan and appraisal, plus an appraisal-gap cap.
• Aggressive: waive inspection and appraisal, large earnest money, and strong proof of funds. This increases risk and should be backed by reserves and professional advice.
• Compromise: keep inspection and promise expedited inspections with repair requests limited to hazardous or major structural items, or set a modest repair cap.
• If a seller asks for an appraisal waiver: offer a limited gap coverage up to a set dollar amount rather than an unlimited waiver.

Diligence checklist before you write an offer

• Secure lender pre-approval and confirm underwriting timeline.
• Gather proof of funds for down payment, gap coverage, and reserves.
• Review disclosures promptly and ask clarifying questions early.
• Pre-schedule inspectors who can start quickly.
• Align strategy to the listing’s competitiveness and days on market.

What happens if appraisal comes in low

If the appraised value is below your contract price and you have an appraisal contingency, you can try to renegotiate, bring cash to cover the gap, or cancel per the contract. If you included an appraisal-gap clause, your exposure is limited to the amount you agreed to cover. If you waived appraisal, plan for extra funds or creative solutions with your lender if available.

How earnest money and proof of funds matter

Bigger earnest money and immediate proof of funds make your offer feel stronger. In San Jose, many winning offers pair tighter contingencies with solid deposits and clear documentation. This gives the seller confidence that you can remove contingencies on time and close.

Title, HOA, and local cost items to review

During your inspection window, review the preliminary title report and HOA documents if applicable. In Santa Clara County, some properties have special assessments or Mello-Roos obligations. Build time in your inspection period to confirm these costs and how they affect your budget.

Putting it together

Your goal is a clean, credible offer that matches the speed of the San Jose market without exposing you to unnecessary risk. Shorter deadlines, clear proof of funds, and targeted protections can balance competitiveness and safety. Work with your lender and your agent to tailor the exact mix for each property.

If you want a calm, strategic plan for your next offer, we are here to help. The Dapkus Real Estate Team will walk you through timelines, structure your contingencies, and coordinate inspections so you can compete with confidence.

FAQs

What are the main contingencies in a San Jose home offer?

• The key ones are inspection, appraisal, loan, and sale-of-home contingencies, each giving you specific rights to investigate, finance, and exit if terms are not met.

How long are typical San Jose inspection and loan contingency periods?

• Inspection windows often run about 5 to 10 days, while loan and appraisal are commonly set for 17 to 21 days, adjusted to your lender’s timeline.

What can I do if the appraisal is lower than my purchase price?

• You can negotiate a price reduction, bring extra cash to cover the gap, cancel if your appraisal contingency allows, or rely on a capped appraisal-gap clause if included.

Is it safe to waive the loan contingency in San Jose?

• It raises risk because you may be obligated to close even if financing is denied, which could put your earnest money at risk per the contract.

Do sellers accept sale-of-home contingencies in competitive listings?

• They are less common in hot listings; if used, expect strict timelines, proof of listing activity, or a kick-out clause so the seller can keep marketing.