Washington State Real Estate Practice Exam 2026 – Complete Preparation Guide

A financing contingency is a provision in a real estate contract that is specifically included to protect the buyer's interests regarding the need for financing. This contingency allows the buyer to withdraw from the agreement without any penalties if they are unable to secure the necessary financing within a specified timeframe. It recognizes that most buyers will need a mortgage or some form of loan to purchase a property, and therefore, it provides a safety net that ensures buyers are not forced to proceed with a transaction if their funding falls through.

While the other options present different aspects of real estate agreements, they do not accurately reflect the purpose of a financing contingency. Ensuring repairs are completed pertains more to inspection contingencies, protecting sellers from low offers usually involves negotiation strategies rather than a specific clause in the contract, and protecting property value is more related to market conditions and appraisals than to the financing aspect of a transaction. Thus, option B stands out as the most appropriate definition of a financing contingency's role in real estate contracts.