Contracts & Contingencies Demystified (Without Needing a Law Degree)
- Kat Moore — The German Realtor®
- Aug 27
- 3 min read
When you buy or sell a house, you’ll meet The Stack — that pile of papers tall enough to use as a coffee table. At the heart of it is the Contract of Sale. Don’t panic — it’s not as scary as it looks once you know what you’re signing.
What Is a Real Estate Contract?
A real estate contract is basically the rulebook for the deal. It’s a legally binding agreement that lays out the price, the deadlines, what stays (appliances, blinds, sheds), and what happens if someone backs out.
Without it, you’d just have a handshake and a lot of crossed fingers — not ideal when hundreds of thousands of dollars are at stake.
💡 Quick note: If all this contract talk already sounds like legal spaghetti, don’t worry—I can break it down for your situation. Reach out here.
Who Creates It?
In Maryland, the Maryland Realtors® Association provides the standard contracts we use.
Those forms are drafted by attorneys (so yes, the legal stuff is lawyer-approved).
Realtors like me 👋 fill in the details: names, prices, dates, financing, contingencies.
Need something unusual? That’s when an attorney writes custom language.
👉 Bottom line: The contract is lawyer-made, Realtor-filled, and client-signed.
What’s Inside the Maryland Contract of Sale?
Earnest Money Deposit (EMD): The buyer’s “skin in the game.” Usually 1–3% of the purchase price, held in escrow.
Purchase Price & Financing: Who’s paying what, and how. Cash? Loan? VA? It all goes here.
Settlement Date: The finish line date — and yes, it’s often the line that causes the most stress.
Inclusions & Exclusions: Ever seen a seller try to take the dining room chandelier? This is where we stop that.
Disclosures & Addendums: Lead paint, HOA, radon, well/septic — Maryland has a form for everything.
What Are Contingencies?
Contingencies are your “if/then” safety nets. Think of them as parachutes — you hope you don’t need them, but you’ll be glad they’re there.
Common Contingencies:
Inspection: If the inspector finds a roof ready to retire, buyer can renegotiate or walk away.
Appraisal: If the house doesn’t appraise at the contract price, buyer can cancel or ask for a price drop.
Financing: If the loan falls through, the buyer can back out without losing their deposit.
Home Sale: Buyer must sell their current house first. Sellers aren’t fans of this one, but sometimes it’s necessary.
👉 Wondering what happens if financing falls through or an inspection gets messy? Let’s talk about how these clauses actually play out in real life. Click here to connect.
Why Sellers Should Care Too
Sure, contingencies sound like buyer escape hatches. But they also keep deals from blowing up at the last minute. It’s better to find out about a problem early, not the day before closing when the moving truck is already packed.
Quick Example
Buyer offers $400,000 with financing and inspection contingencies.
If inspection finds a cracked foundation → buyer can walk or renegotiate.
If financing fails → buyer can walk, deposit refunded (as long as they’ve acted in good faith and followed the terms of the contract).
If everything checks out → 🎉 settlement day!
Kat’s Top 5 Tips
Deadlines matter. A missed date can kill a deal faster than a broken water heater.
Ask before you sign. Your Realtor’s job (hi 👋) is to explain what you’re agreeing to.
Don’t waive contingencies lightly. Saving a week of stress now could cost you thousands later.
Sellers: read the fine print. Addendums (HOA, well, septic) can have hidden surprises.
Communicate. Most “contract emergencies” can be solved if everyone talks early.
👉 Bottom line: Contracts are the rulebook. Contingencies are the parachute. Know both, and the paperwork pile won’t feel quite so scary.
✅ Bottom line: A contract isn’t just paperwork—it’s your safety net in the transaction. Want someone to translate the fine print into plain English?
Kat Moore | Realtor | Advisor
Samson Properties
📞 410-414-5967 (cell), 443-975-7555 (office)
⚠️ Disclaimer: I’m not an attorney. This is general information only — always review contracts with your Realtor, title company, or attorney.
Comments