Heard you need to waive contingencies to win a home in Los Gatos? You are not alone. In Silicon Valley’s fast market, it can feel like protections are optional. The truth is, contingencies are there to protect you, and you can still write a strong offer without taking on avoidable risk. In this guide, you’ll learn what each contingency does, common timelines, and smart strategies that work locally. Let’s dive in.

What a contingency is in California

A contingency is a condition in your purchase contract that must be met for the sale to move forward. If the condition is not met within the agreed time, you can usually cancel without penalty. California buyers and sellers commonly use the California Association of Realtors Residential Purchase Agreement, which sets standard contingency language and deadlines that start at acceptance.

You will also receive seller disclosures such as the Transfer Disclosure Statement and Seller Property Questionnaire, along with a Natural Hazard Disclosure. These documents are meant to inform your investigations and help you decide whether to remove contingencies. Pay close attention to deadlines, because missing one can limit your options later.

The four core contingencies

Inspection contingency

The inspection contingency gives you time to investigate the property’s condition. You can order general and specialist inspections, then decide whether to request repairs or credits, or cancel if a serious issue is uncovered.

In California, inspection windows often run 7 to 17 days from acceptance. In competitive Los Gatos offers, buyers sometimes tighten this to about 5 to 10 days. Older homes and hillside properties in Los Gatos can raise unique concerns like drainage, retaining walls, foundation movement, chimney safety, and wildfire exposure, so plan enough time for specialists if needed.

Tradeoffs: Waiving or rushing inspections reduces your protection. If you remove this contingency and later find defects, you may still have to close or risk your deposit. Most sellers prefer shorter inspection periods rather than no inspection at all.

Quick tips:

• Schedule inspectors the day your offer is accepted.
• Prioritize key specialists for hillside or older homes.
• Focus requests on significant health, safety, or system issues.

Loan contingency

The loan contingency protects you if your lender does not approve your financing under the contract terms. You agree to apply and cooperate in good faith, then remove the contingency once your loan is secure.

Typical timelines range from 17 to 21 days, depending on lender speed. In Silicon Valley, sellers weigh your financing strength heavily. A full underwriter-reviewed pre-approval is stronger than a basic pre-qualification. Only consider shortening or removing this contingency if your lender confirms you are truly ready to fund and you can cover surprises.

Risk: If you remove the loan contingency and financing fails, you may need to close with cash or risk losing your earnest money deposit.

Quick tips:

• Seek a full underwriter pre-approval before you shop.
• Ask your lender for realistic timing on appraisal and final approval.
• Share proof of funds and pre-approval with your offer package.

Appraisal contingency

The appraisal contingency confirms the home appraises at or above the contract price for lending. If the appraisal comes in low, you can renegotiate, bring in extra cash, or cancel if allowed by your contract.

In Los Gatos, buyers sometimes use an appraisal gap clause. This states you will cover a specific shortfall between appraisal and contract price up to a set amount. It gives sellers more confidence without giving up all protection.

Tradeoffs: Removing the appraisal contingency means you agree to cover any difference between the appraised value and your contract price if the lender limits the loan to the appraisal.

Quick tips:

• Discuss a capped appraisal gap with your agent and lender.
• Have liquid funds ready if you plan to cover a shortfall.
• Time your appraisal early to avoid delays.

Sale contingency

A sale contingency makes your purchase dependent on selling your current home. It usually includes deadlines for listing, accepting an offer, and closing. In a competitive Los Gatos market, long or open-ended sale contingencies are often rejected. Short windows or a clause allowing the seller to keep marketing the property are more realistic.

Alternatives include bridge financing, rent-back arrangements, or coordinated timing with your current sale. These can reduce or remove the need for a sale contingency.

Quick tips:

• If you need a sale contingency, keep timelines tight and show active progress.
• Consider bridge financing options with your lender.
• Explore a rent-back so the seller can stay briefly while you close your sale.

Other smart protections

Beyond the big four, several items matter in Los Gatos:

• Title review: Confirm clean title and resolve liens or easements that affect use.
• HOA documents: For condos or HOA homes, review budgets, reserves, rules, and planned assessments.
• Permits and code: Older homes sometimes have unpermitted work. Build in time to review permits and municipal requirements.
• Natural hazards: The Natural Hazard Disclosure may flag wildfire, landslide, earthquake, or flood areas. On hillside properties, consider geotechnical opinions if there are concerns.

How removing contingencies changes risk

Removing a contingency signals that you are satisfied with that risk. If you later discover an issue or cannot complete financing, your options are limited. Consequences can include losing your earnest money deposit and, in some cases, being held to the contract’s terms.

Common timing patterns in California include:

• Inspection: 7 to 17 days, often shortened to 5 to 10 in competitive cases.
• Loan: 17 to 21 days, sometimes longer based on lender capacity.
• Appraisal: Often within the loan period, typically 2 to 3 weeks into escrow.
• Sale: Highly variable, with shorter periods more acceptable locally.

If you need more time, request a written extension before your deadline. Clear communication can protect your deposit and keep the deal on track.

Local strategies that work in Los Gatos

Sellers in Los Gatos often favor offers with fewer or shorter contingencies, strong financing evidence, and larger earnest money deposits. You can stay competitive without unnecessary risk.

Consider these approaches:

• Secure a full underwriter pre-approval and share proof of funds.
• Shorten, but do not eliminate, the inspection window when possible.
• Use a capped appraisal gap to balance risk and competitiveness.
• Coordinate appraisal early to avoid last-minute surprises.
• If you own a home, explore bridge financing or tight sale timelines with a seller “right to continue” marketing.
• Ask for pre-offer access for an informational inspection when appropriate and feasible.

A simple game plan

Use this step-by-step plan to right-size your protections:

1. Define goals and risk tolerance

• Decide what matters most: speed, price, or flexibility.
• Clarify how much deposit risk you can accept.

2. Strengthen financing early

• Get an underwriter-reviewed pre-approval.
• Confirm appraisal and closing timelines with your lender.

3. Plan inspections like a project

• Line up general and specialist inspectors at acceptance.
• Prioritize roof, foundation, drainage, chimney, and any hillside items.

4. Calibrate contingencies to the home

• Shorten inspection days if reports and access allow.
• Consider a capped appraisal gap if comps are tight.
• Avoid removing the loan contingency unless you can cover a funding issue.

5. Track deadlines during escrow

• Put contingency dates on a shared calendar.
• Request extensions in writing before deadlines if needed.

6. Remove contingencies with confidence

• Remove only after you have the information you need.
• If new information surfaces, discuss credits or repairs before removing.

Work with a local pro

Contingencies are tools. In the Los Gatos market, the best result comes from tailoring them to the property and the competition. A local expert can help you read the room, time your steps, and keep your leverage.

If you want a concierge-style, low-drama path to a winning offer, connect with Shannon Ray. You will get local insight, careful timeline management, and introductions to trusted lenders and inspectors so your protections match your goals.

FAQs

What is a contingency in a California home offer?

• A contingency is a contract condition that lets you cancel within a set period if specific requirements are not met, such as inspections, loan approval, or appraisal.

How do inspection contingencies work in Los Gatos?

• You typically get 7 to 17 days, often shortened to 5 to 10 in competitive cases, to complete inspections, review disclosures, and decide whether to request repairs, negotiate credits, or cancel.

What happens if my appraisal is low?

• You can renegotiate, bring extra cash, use a capped appraisal gap if included, or cancel if your contract allows; removing the appraisal contingency means you may cover the difference.

When should I waive a loan contingency?

• Only when you have a strong underwriter-reviewed pre-approval and the ability to close even if the lender changes terms or timing; otherwise your deposit may be at risk.

Are sale contingencies accepted in Los Gatos?

• They are less attractive in multiple-offer situations; shorter windows or a seller “right to continue” marketing can help, and alternatives like bridge financing may reduce the need.

Can I do a pre-offer inspection in Silicon Valley?

• Sometimes; it requires seller cooperation and access, and it can help you write a cleaner offer while still understanding the property’s condition.

What if I miss a contingency removal deadline?

• The seller may gain rights under the contract, including potential termination; request extensions in writing before deadlines and keep communication timely.