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A financing contingency is a clause included in a real estate purchase agreement that allows the buyer to back out of the deal if they are unable to secure financing for the home. This provision primarily benefits the buyer, as it ensures that they are not obligated to complete the purchase if they cannot obtain a mortgage or loan sufficient to fund the transaction.

By including a financing contingency, buyers can proceed with the purchase without the risk of losing their earnest money deposit or being stuck with significant financial commitments. It provides them with a safeguard against market fluctuations or changes in their financial situation, offering peace of mind that they will not be forced into a purchase that they cannot afford.

The seller, while having the opportunity to close the deal, is still at risk because the sale depends on the buyer obtaining financing. If the buyer cannot secure the loan, the seller must find another buyer, which can lead to delays and additional costs. Therefore, the primary benefit of the financing contingency is clearly aimed at protecting the buyer's interests in the transaction.