You found the right home in San Mateo and you want your offer to stand out without putting your deposit at risk. That balance comes down to how you use purchase contingencies. The right structure can give you room to investigate, secure financing, and handle a low appraisal, while still looking competitive in a multiple-offer situation. In this guide, you’ll learn how inspection, loan, and appraisal contingencies work in California, what’s common in San Mateo, and how to tailor timelines to your comfort level. Let’s dive in.
What purchase contingencies do
Contingencies are conditions in your purchase contract that must be satisfied or intentionally waived for the sale to move forward. In California, most buyers and sellers use standardized forms from the California Association of REALTORS, often called the RPA. These forms spell out investigation, loan, and appraisal terms, the timing for each step, and how to remove or exercise your rights. You can review the overall framework in the California Association of REALTORS resources.
Contingencies protect you, but they are also negotiable. Shorter timelines or limited protections can make your offer more appealing to a seller. On the other hand, removing protections too early can put your earnest money at risk if a later issue surfaces.
Tip: “Acceptance” means the moment both parties sign the agreement with matching terms. Most contingency clocks start from Acceptance.
Inspection contingency: your investigation window
What it protects
An inspection contingency gives you time to investigate the property’s condition, review disclosures, and order inspections. During this period, you can request repairs or credits, continue negotiating, or cancel and recover your deposit if you act within the contract timeline. In San Mateo’s older housing stock, common focus areas include foundation, drainage, roof, HVAC, pest, and sewer lateral.
Typical wording and timelines
The contract sets a specific number of calendar days after Acceptance for you to complete investigations and either remove the contingency in writing or cancel. A common pattern is: “Buyer to complete inspections within X days of Acceptance. If Buyer does not deliver written notice within X days, the inspection contingency is deemed removed.” If you cancel during the window, your deposit is typically returned under the contract’s terms.
San Mateo negotiation tips
- Shorten the inspection period to be more competitive, often 10 to 17 days in competitive offers.
- Keep the contingency but agree to purchase as-is after removal. You still get to inspect, but you limit repair requests.
- Focus on high‑value inspections. For older Peninsula homes, a general inspection, pest report, and sewer lateral inspection are common priorities.
- Keep every request and notice in writing, and be mindful of the exact deadline.
Buyer checklist: inspections
- Schedule your general and specialty inspections immediately after Acceptance.
- Review disclosures, including Transfer Disclosure Statement, Natural Hazard Disclosure, and any lead-based paint disclosures for pre‑1978 homes.
- Confirm scope with your agent: pest, roof, sewer lateral, foundation, HVAC, and any specialty needs.
- Deliver your repair request, credit request, or cancellation in writing before the deadline.
- Remove the contingency in writing only when you are ready to proceed.
Loan contingency: financing approval
What it protects
The loan contingency protects you if you cannot obtain the specified financing. The contract typically requires you to apply promptly, provide documentation, and secure a lender’s written commitment by a set date. If you cannot get approval in time and you give timely written notice, you can usually cancel without penalty under the agreement.
Local norms and risks
Sellers in San Mateo often prefer pre‑approved buyers and may ask for shorter loan contingency timelines, commonly 17 to 21 days, depending on the lender and loan type. Pre‑approval is not the same as final underwriting approval. Appraisal results and underwriting conditions can still affect your loan. If you remove the loan contingency before your lender is fully ready, your deposit could be at risk if financing later fails.
For background on how underwriting and appraisals fit into a mortgage, review the Consumer Financial Protection Bureau’s mortgage resources.
Buyer checklist: financing
- Secure a lender pre‑approval before house hunting and include it with your offer.
- Apply for the loan within the timeframe stated in your contract.
- Order the appraisal promptly, in coordination with your lender.
- Track the loan commitment deadline and be ready to request a short extension if needed.
- Do not remove the loan contingency until your lender has cleared major conditions.
Appraisal contingency: valuation protection
What it protects
An appraisal contingency protects you if the appraised value is lower than the purchase price. If there is a shortfall, common options include canceling under the contingency, bringing additional cash to cover the gap, or asking the seller for a price reduction or credit. Your lender will base the loan amount on the appraised value, not the contract price.
Local strategies for low appraisals
Appraisal gaps are not unusual in competitive San Mateo markets. Buyers often respond in these ways:
- Include an appraisal gap promise, committing to cover a set dollar amount above the appraised value.
- Shorten the appraisal contingency period to show confidence.
- Waive the appraisal contingency in all‑cash offers, or when you are prepared to bring more cash if needed.
If you finance the purchase and waive appraisal protection, be sure you can supply additional cash if the appraised value comes in low. Otherwise, you risk being in breach after removal.
Buyer checklist: appraisal
- Confirm with your lender how quickly the appraisal can be ordered and delivered.
- Decide whether to include a defined appraisal gap amount in your offer.
- If the appraisal is low, act within the timeline to request a price adjustment, bring cash, or cancel.
- Remove the appraisal contingency only when you are comfortable with the valuation path.
Timelines that are common in San Mateo
There are no state-mandated default periods. Your contract controls. In San Mateo single‑family transactions, the following ranges are commonly seen in competitive conditions:
- Inspection period: about 10 to 17 days after Acceptance.
- Loan contingency: about 17 to 21 days, sometimes longer based on loan complexity.
- Appraisal timing: typically tied to the loan process, with reports often returning 7 to 14 days after ordering.
- Escrow length: about 30 to 45 days for financed offers, and 7 to 21 days for all‑cash.
These ranges shift with market conditions, lender capacity, and property specifics. Always align your offer timelines with your lender’s actual speed and your inspection plan.
Smart ways to balance risk and competitiveness
You have options beyond a full waiver. Consider these strategies:
- Shorten, do not waive. Offer a shorter inspection or loan period to appeal to the seller while keeping a safety net.
- Define an appraisal gap. Pledge a specific dollar amount you will cover if the appraisal is short, instead of removing protection entirely.
- As‑is with inspection rights. Agree to take the home as‑is after removal, but keep your right to inspect and cancel within the window.
- Strengthen your deposit. A larger earnest money deposit can offset shorter contingency periods in the seller’s eyes. Be sure you understand deposit treatment if you later cancel.
How to protect your deposit
Your deposit protection comes from the exact words and deadlines in your contract. If you remove a contingency, you typically give up the right to use that contingency later. If a new issue emerges afterward that would have been covered, your deposit may be at risk. This is why buyers who waive protections often increase cash reserves, adjust deposit size, or use products that reduce risk.
Always remove contingencies in writing when you are ready. If you need more time, request an extension before the deadline. Keep all communications in writing so there is a clear record.
Disclosures and as‑is terms
California requires specific seller disclosures, such as the Transfer Disclosure Statement and the Natural Hazard Disclosure. The inspection window is when you verify and follow up on those disclosures. An as‑is sale means the seller is not agreeing to make repairs, but you still have the right to inspect. You can cancel within your inspection window if you choose, or proceed knowing the condition.
For general forms and buyer advisories on inspections and financing, see the California Association of REALTORS consumer resources.
Putting it all together on a San Mateo offer
A strong offer in San Mateo often pairs shorter timelines with strong documentation. You might set a 10 to 14 day inspection window, a 17 to 21 day loan period, and an appraisal gap of a defined amount. You include a pre‑approval letter and proof of funds for the down payment and any gap. You schedule inspections immediately after Acceptance and track every deadline on a simple calendar.
If the appraisal comes in low, you move quickly. You can add cash to bridge a pre‑agreed gap, ask the seller for a partial price reduction, or cancel within the contingency period. Whatever path you choose, you keep each step in writing and on time.
Quick reference: your first 72 hours after Acceptance
- Day 0: Start all clocks. Confirm Acceptance time and update your deadline calendar.
- Day 1: Apply for your loan if not already complete. Share the ratified contract with your lender.
- Day 1: Order inspections. Book general plus any specialty inspections based on the home.
- Day 2: Coordinate appraisal order with your lender.
- Day 3: Review disclosures and list follow‑up questions. Plan for any repair or credit requests.
Ready to craft a confident plan?
You can compete in San Mateo without guessing on risk. With a clear strategy for inspections, loan approval, and appraisal, you control your timelines and protect your deposit. If you want help tailoring an offer to a specific home and lender timeline, reach out to Unknown Company to schedule a complimentary Peninsula market consultation.
FAQs
What does an inspection contingency do in San Mateo?
- It gives you time after Acceptance to investigate the home, review disclosures, request repairs or credits, or cancel and recover your deposit within the contract window.
How long are typical contingency periods for San Mateo homes?
- Competitive offers often use about 10 to 17 days for inspection and 17 to 21 days for loan approval, with appraisal timing tied to the loan process and lender speed.
What happens if the appraisal is lower than my purchase price?
- Your lender bases the loan on the appraised value, so you can bring extra cash, ask the seller to adjust price or credit, or cancel within your appraisal or loan contingency.
Is it safe to waive the inspection contingency to win an offer?
- You can, but it increases risk since you lose that protection; most buyers shorten timelines or agree to as‑is terms while keeping the right to cancel within the inspection window.
If my lender denies the loan, do I get my deposit back?
- It depends on your contract. If your loan contingency is still in place and you met your duties and deadlines, you can usually cancel without penalty under the agreement.
What is an appraisal gap clause?
- It is a promise to cover a specific dollar amount if the appraisal is short, which can strengthen your offer while limiting your maximum cash exposure.
