Definition
A contract provision allowing buyers to back out if they can't secure a loan, essentially making the deal conditional on a bank's approval. It's the escape hatch that makes sellers nervous and buyers sleep better at night.
Example Usage
They came in with a strong offer but included a contingent financing clause, so we're still showing the property in case they can't get approved.
Origin
Real estate contract law terminology
Fun Fact
In hot markets, sellers often favor offers without financing contingencies—which is why cash buyers have such an advantage, even if they're secretly planning to refinance immediately after closing.
Source: Real estate contract and transaction terminology
Related Terms
Translate This Term
See “contingent financing clause” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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