What if you didn't like this particular contractor or you discovered they did not have a good reputation? 

Go to the Consumer Financial Protection Board web site and search "predatory lending practices" much of what will be found is aimed at institutional lenders, the same theory applies to any lender, also look at the definitions of lender, financial arrangement, secured transaction. 

So you discovered a duplex fixer that's currently subject to probate. 

We pulled up some old linoleum in the kitchen and discovered old original Pine floors.

I have had several brokerages institute high minimum liability limits ($250k/$500k/$100) for their agents and have their personal auto policy include a "business use" endorsement... but asking every agent to get a commercial policy and name them as AI is over the top and not reasonable.

I suspect every state has its own set of rules; out here, it can only make you whole - i.e. you bought a property for $50k that was supposed to be clear of any liens, get a search & insurance, and then later find an existing contractor's lien for $10k, they will be responsible for paying that fee, not reimbursing you for a $100k sale that went south when it was discovered, or something similar.

The only reasons to select a financing contingency is that a lending institution will want to see it in the contract and that the seller is alerted to the timeline.  

A few years later, I discovered this subject I love very much, Personal Development.

These fines were not discovered until the day before us selling the property by our buyer's attorney, who ran a municipal search using the previous owner's name in addition to the property's address.

I am from the Detroit area and discovered BP a couple weeks ago.