BIC TIP #1232: The Offer to Purchase Has No Financing Contingency
It is one of the most misunderstood parts of the North Carolina Offer to Purchase and Contract. In this BIC TIP, Stephen Long sets the record straight: there is no financing contingency in our standard contract. What the buyer writes about financing is a disclosure, not a binding promise and not an escape hatch.
Disclosure, Not a Condition
In the Offer to Purchase, the buyer discloses how they intend to buy the property. Cash, conventional, FHA, whether they need to sell another property first, whatever the situation looks like. That information goes from buyer to seller so the seller understands the offer.
But it is not a binding term. The buyer is telling the seller how they plan to pay. They are not getting a free pass if that plan falls apart.
The Binding Terms Still Apply
The terms of the contract, like the purchase price and the time to close, are binding and remain in play. If the buyer’s financing changes, the closing obligations do not automatically change with it.
So if the buyer needs to switch loan programs, or the appraisal comes in low, or something else goes sideways with their loan, Stephen is blunt: that is not the seller’s problem.
What the Buyer Can Do
The buyer has to figure out how to meet the other terms of the contract. If they cannot, they may need to terminate. Depending on where they are in the timeline, that can mean losing their due diligence fee and possibly their earnest money.
This is why the due diligence period matters so much. Buyers should use it to get financing questions answered, not assume a contingency will protect them later. For specific situations, consult a real estate attorney.
The Practical Takeaway
Teach your buyers early: the NC Offer to Purchase has no financing contingency. Their financing information is a disclosure, the contract terms are binding, and financing problems are theirs to solve. Work closely with the lender during due diligence so nobody is surprised when it counts.
This BIC Tip is general real estate education for licensees and consumers, not legal, tax, or financial advice. Rules and forms change, so verify current NCREC rules, MLS rules, and standard forms, and consult a North Carolina attorney or qualified professional about your specific situation. See Disclaimers & Disclosures.
Mortgage topics are discussed for general education only and are not a commitment to lend or an offer of credit. Stephen Long, NMLS #2795861, Keller Home Loans, a division of Mutual of Omaha Mortgage, Inc., NMLS ID 1025894. Equal Housing Opportunity.
