Should I Waive Contingencies to Win a Bid in San Diego?
TL;DR
Waiving contingencies can help your offer stand out in San Diego’s hot market.
Doing so increases your financial and legal risk.
Consider alternatives like shortening timeframes or adding appraisal gap clauses.
Always consult with the best San Diego broker or realtor for case-by-case advice.
Why Are Buyers Waiving Contingencies in San Diego?
The San Diego housing market remains highly competitive, though slightly less intense than last year. As of June 2025, the median sale price in the city is $994,000, up 1.4% year-over-year. Buyers continue to compete aggressively, with many properties receiving multiple offers, though the average has moderated to about four offers per listing.
One of my recent clients in North County told me:
“Sellers wouldn’t even counter offers with contingencies. If you want to compete, they expect clean, quick offers.”
Waiving contingencies, especially inspection, financing, and appraisal, often signals a buyer’s commitment. But is it wise?
What Are the Key Contingencies, and Why Do They Matter?
Here’s a quick breakdown:
Inspection Contingency
Lets you walk away or renegotiate if serious issues arise during a home inspection.Appraisal Contingency
Protects you if the home appraises for less than the offer. Without it, you pay the difference.Financing Contingency
Lets you cancel if your loan falls through, critical for most non-cash buyers.
In California, these typically range from 5 to 30 days. Removing them means the moment you sign, you’re committed, risks and all.
True Story: How One Buyer Won and Nearly Lost
A San Diego couple I worked with had made over 10 offers, all with standard contingencies. Zero bites. Finally, I advised removing the appraisal and inspection clauses but keeping financing. The result? Offer accepted.
What they didn’t expect was a cracked slab and foundation repair costs over $25,000. Because they waived inspection, they were on the hook.
Fortunately, we negotiated a seller credit post-disclosure, but the lesson was clear. Know what you’re giving up.
What Are the Pros and Cons of Waiving Contingencies?
Pros:
Stronger, more appealing offer
Faster closing timeline
May beat higher offers with contingencies
Cons:
No exit if issues arise
Risk of financial loss, especially appraisal gaps
Greater liability if financing fails
Are There Safer Alternatives to Full Waivers?
Yes, and the best San Diego realtors often use these strategies:
Shorten the timelines for contingencies to 5 to 7 days instead of 17 to 21
Pre-offer inspections where possible
Appraisal gap coverage clauses, for example, buyer agrees to cover up to $20,000 difference
Higher earnest money deposits to show commitment
One of my investor clients waived inspection only after walking the property with their contractor. It wasn’t blind risk, it was a calculated decision.
How Can a Top Broker Help You Navigate This?
A seasoned San Diego broker will:
Assess listing trends in the zip code
Advise on seller expectations for contingencies
Leverage relationships with listing agents
Craft competitive yet safe offers
Many also access off-market listings where terms are more negotiable.
Local Market Snapshot
Median sale price (June 2025): $994,000 (city), $878,000 (county)
Average offers per home: 4 to 6
Average days on market: 20 to 28 days
Typical contingency period: 17 days (standard)
With slight cooling in the pace of sales, buyers still need to act decisively but don’t always need to waive all protections.
Exploring the Psychology of the San Diego Seller
San Diego sellers often receive multiple offers within days of listing. They’re seeking certainty and speed. When you remove contingencies, your offer says, “I’m serious, and I won’t slow you down.” But that same message may signal desperation if not presented correctly.
Some sellers see waived contingencies as a green light, but others, especially seasoned investors, may be wary. A too-clean offer can raise red flags. Are you hiding something? Are you likely to pull out at the last second with cold feet?
Common Myths About Waiving Contingencies
Myth #1: Waiving contingencies guarantees you’ll win.
False. While it boosts your odds, sellers may still prefer offers with stronger pricing or better terms.
Myth #2: You can always renegotiate later.
Not true in California. Once a contingency is waived, your legal grounds for backing out shrink substantially.
Myth #3: Everyone else is doing it.
Also false. Many buyers still include some protections. The best San Diego realtor will help you decide which ones make sense for your situation.
Strategic Ways to Strengthen Your Offer Without Full Risk
Here are some additional tools the best San Diego brokers use to win deals:
Escalation Clause: Offer to beat competing bids by a set amount, up to a ceiling.
Offer Letters: Personal notes to the seller can sometimes tip the scale emotionally.
Flexible Closing: Let the seller pick the close date.
Leaseback Options: Offer to let the seller stay post-close, especially useful for sellers who haven’t found a new home.
These strategies build trust without eliminating your buyer rights.
The Role of Disclosures in California Real Estate
California law requires sellers to provide a wide range of disclosures, even if contingencies are waived. These include:
Transfer Disclosure Statement (TDS)
Natural Hazard Disclosure (NHD)
Known defects and upgrades
However, these disclosures are only as useful as your ability to act on them. If you’ve already waived inspection or appraisal contingencies, your options to renegotiate or cancel may be gone.
Technology Tools That Can Help
Leading San Diego brokers now use tools like:
3D Home Tours for remote due diligence
Automated Valuation Models (AVMs) to spot pricing inconsistencies
Digital Document Management to review seller disclosures quickly
These tools help speed up your decision-making without compromising accuracy, a critical edge when time is tight.
Legal and Financial Implications of Waiving Contingencies
Waiving contingencies isn’t just a negotiation tactic, it’s a binding legal move. Buyers in San Diego who waive these protections may be liable for breach of contract if they later back out for reasons covered by contingencies. It’s important to understand:
Default clauses in California purchase contracts
Non-refundable deposits and how they’re treated in escrow
Legal exposure if problems emerge post-closing and you’ve waived inspection rights
The best San Diego realtor or broker will walk you through these risks line by line so you’re never caught off guard.
When Should You Absolutely NOT Waive Contingencies?
There are red flags that even the most experienced buyer should not ignore:
Properties sold as-is with no disclosures
Homes with visible structural issues or water damage
Unusually short listing timelines that limit due diligence
Seller requests for non-refundable earnest money on day one
If any of these apply, even the most aggressive buyers should consider retaining at least inspection rights. The best San Diego broker will help balance competitiveness with caution.
Final Word: Risk Should Match Your Readiness
Before waiving any contingency:
Understand your financial cushion
Evaluate how much repair risk you can stomach
Consult a broker who knows San Diego street by street
Sometimes the right move isn’t to waive, but to strengthen.
FAQs
Q: Can I waive only some contingencies and not all?
Yes. Many buyers waive appraisal or inspection while keeping financing.
Q: What if the home doesn’t appraise?
Without an appraisal contingency, you must pay the difference or lose your deposit.
Q: Is waiving legal protection post-disclosure risky?
Yes. While disclosures still apply, your window to act shrinks without contingencies.
Q: Is waiving contingencies ever a good idea for first-time buyers?
Only if you have strong financial reserves and guidance from the best San Diego realtor.
Q: What’s the safest way to make a competitive offer in San Diego right now?
Shorten your timelines, include an escalation clause, and work with a top San Diego broker who understands seller psychology.
Q: Do sellers prefer waived contingencies or higher offers?
It depends. Some want maximum price, while others prioritize certainty and a fast, clean closing. Ask your San Diego real estate broker to assess each situation.
Ready to Compete Wisely?
Buying a home in San Diego shouldn’t feel like gambling. With the right guidance, you can craft an offer that stands out without standing on shaky ground.
Call or text (858) 405-0002 • scott@scottchengteam.com
Let’s make your next offer your winning one.
