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If you get bad results on your home inspection, an inspection contingency lets you back out of the contract.

Having a back-out plan is a must for smart home buying. If the home has an irresolvable flaw, it doesn't appraise for the purchase price, or your lender refuses to fund your loan, having contingencies on your contract gives you the right to cancel the transaction. Think about it this way: would you spend $100 in a store that doesn't have a 30-day return policy? If your answer is no, you wouldn't want to put hundreds of thousands of dollars on the line without the right to bail.

• Learn what contingencies you must have

• Find out why you should have your home thoroughly inspected

• Get tips for buying your first home in FrontDoor's First-Time Buyer's Guide

• Learn what moves to make and what mistakes to avoid when buying a home

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