Contingencies are certain conditions in the purchase agreement that need to be met to have a fully binding purchase agreement. Most buyers will have a purchase agreement that is subject to contingencies, usually inspections and financing. There are others as well, but these are the most common.
These contingencies spell out what conditions have to be met to continue forward. Usually all the contingencies are removed, except the financing contingency, before the day of closing. The financing contingency is usually carried forward until the closing itself.
Usually an inspection contingency gives the buyer 5-7 days to perform any or all inspections on the property. Once they have inspected the property they can move forward, or ask for things to be addressed if things are not working properly. Keep in mind that the purpose of the inspection contingency is to give the buyer time to do their due diligence by inspecting the house, so that they can be sure the house meets their expectations vs how much they are paying for the house. Every house is going to have a bunch of little items that need addressing but the point of the inspection is to catch the major items. Major items include things such as a defective sewer line, radon mitigation, roof, furnace, air conditioning, structural issues, plumbing issues, electrical issues, chimney issues, etc. These are items that would be expected to work correctly, and that could cost a significant amount.
The little things should not matter as much. These could be a missing smoke detector, a broken outlet, a dripping tub faucet, loose tile, a noisy dishwasher,
Anything the buyer asks for can be negotiated. And once there is an agreement, the inspection contingency is usually removed.
The financing contingency is one that usually lasts until closing. It gives the buyer time to apply for and be approved for financing. Usually what happens is that once the inspection contingency is removed, buyers apply for the mortgage with terms outlined on the contingency form. If the buyer can't get approved for the mortgage, usually the earnest money is returned back to the buyer.
There is a provision on this document for a "written statement" to be prepared by the lender by a certain date. This is to give some assurances that the buyer is qualified for a mortgage by that specified date and that all the pieces for the mortgage are in place.
If the property is an association property, Minnesota state law gives the buyers a 10 day period to review pertinent documents, namely: the Declaration, Articles Of Incorporation, Bylaws, Rules And Regulations, amendments or supplemental declarations, and a Resale Disclosure Certificate. The 10 calendar days start after the receipt of all the documents. This is to give the buyer time to make sure the association fits their expectations. They can back out within the 10 days at any time and without specifying a reason.
If the buyer needs to sell their house to purchase your house, they may use this contingency. This gives the buyer a chance to sell their house, while still purchasing your house. You as the seller can demand the buyer to remove this contingency and they will have a specified number of days to remove the contingency. They can do so by either having their house sold, change their purchase to not be contingent on their sale, or they can cancel their purchase.