What Does Contingent Mean In Real Estate?

What Does Contingent Mean In Real Estate?
by Tamara Rein - November 16, 2021

Contingencies are a great option for buyers who want to go forward with their purchase but need some assurance that the deal will work. A contingent offer means they're still serious about buying your house even if there are contingencies such as an inspection or appraisal before closing on it - which could take days.

The meaning of “contingent” is that there are certain conditions to meet before the contract becomes valid. You might think this means it's not a real estate deal until all requirements for satisfaction have been completed, but in reality, these contingencies can be as simple or complicated depending on what type and when you buy!

A common example: A buyer inserts an offer with no contingencies at a hot market; however if they want their bid approved quickly (or just hope) then including some specific added benefits could sweeten things up enough so it gets done.

There are five types of contingencies most often used within real estate contracts, including:

Home Inspection Contingency: 

The offer will go through if the home’s inspection report doesn't reveal anything the buyer wasn't already aware of, or an inspector finds structural/hazardous issues within their future property.

Appraisal Contingency:

Appraisal Contingency means that the offer goes through if and only when a lender approves your appraisal after assessing an assessment of the home’s value based on comparable houses in their area.

Mortgage Contingency

After the home buyer has applied for a mortgage, they are waiting to find out if it was approved. This condition is known as a financing contingency and usually occurs because of some lender requirements that need meeting before giving approval on funding your loan.

Home Sale Contingency:

In the event that a potential buyer sells their current home to buy your new property, you will get paid. If there is an offer with this contingency in place it may be listed as "Pending."

Title Contingency: 

Title contingencies are a great way to protect the buyer from getting stuck with an unwanted property. If it turns out there are unresolved legal or financial issues with the title, they can pull their offer and walk away without paying anything more than what was paid just for looking at houses in that area.

A contingency clause doesn't necessarily mean all hope is lost for prospective buyers. Different states have different laws as it surrounds contingencies so you'll want to speak with your Realtor about the current local rules of contingent homes in every market, but there are some cases where a home may fall through at closing and this usually protects both parties if they decide together that termination would be best.

To learn more, click here

MOST RECENT
Navigating Change with Ease The Role of Professional Moving Companies
Navigating Change with Ease: The Role of Professional Moving Companies
Moving to a new home or office can be an exciting chapter in one's life, symbolizing change, growth, and new opportunities. However, the process of relocating can also be a daunting task, filled with challenges and stress. This is where ...
How to Ensure Your Rental is Well Looked After
How to Ensure Your Rental is Well Looked After
Unfortunately, rental properties get ruined much quicker than others. This is because nobody is going to treat your property as well as you will. You’ve put your time and energy into securing this piece of real estate, so it’s only ...
How to Stage Your Real Estate to Appeal to Families
How to Stage Your Real Estate to Appeal to Families
The average age of an American home buyer is 36, which means the chances of them bringing a family along for the ride are high. This is essential information if you are selling your home, as this demographic has distinct ...
Paying For an Unexpected Home Repair
Paying For an Unexpected Home Repair
Imagine you're journeying across the high seas, every bit of the expansive horizon matching the thrill of discovery. Suddenly, an unexpected storm hits, threatening to sink your ship. This precarious situation mirrors an unexpected home repair: an unforeseen circumstance disrupting ...
What Every Homeowner Should Know About Patio Privacy Screens
What Every Homeowner Should Know About Patio Privacy Screens
Are you in the market for a patio privacy screen but don't know where to start? This guide will take you through everything you need to know about patio privacy screens, from choosing the right material to installation and maintenance. ...
1 2 3 84
logo
Prudential Cal strives to provide the most detailed information about the real estate industry. We assist people in making the best decisions possible by offering unique insights into the global real estate market and advice for both homebuyers and sellers.
Quicklinks
Additional Information
Copyright © 2023 Prudential Cal. All Rights Reserved.
DMCA.com Protection Status
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram