The housing inventory is disappearing rapidly, and it is a sellers market. Then, to add to a buyer's problems, buyers with mortgage contingencies are getting knocked out of the the housing game.

An article in the New York Times explains that sellers are starting to seek offers without mortgage contingencies, which are usually included in a sales contract to give buyers the option of backing out if they cannot obtain financing within a specific period.

Although this is great for the seller, the article said buyers face a hefty risk if they choose to not include the contingency since it usually means they cannot get their downpayment back.

In result of the harsh conditions, some buyers have decided to pull out of the market all together until inventory loosens up.