If you’re in the market to buy a house, you probably spend a lot of time looking at listings. In your search, you might come across home listings listed as “contingent.” Does that mean they’re not for sale anymore? Read on to learn what contingent listings are, and whether you should get your hopes up over these homes.
What does contingent mean in real estate?
In general, contingent means “depending on certain circumstances.” In the world of real estate transactions, it means the sale depends on the contract’s contingencies being met. A contingent listing is one where the seller has accepted an offer, but is opting to keep the listing active while they make sure all conditions are properly met.
If the contractual conditions are met — both by the buyer and the seller — the sale will go through. But if an issue comes up, one or the other party may have the right to back out of the contract. In this case, a contingent-listing home might return to the market and become available for purchase again.
What are common contingencies in real estate?
Real estate transactions can involve massive amounts of money, so both buyers and sellers want to make sure that there aren’t any surprises waiting for them at the finish line. Both parties can include contingencies in the transaction to protect themselves from unexpected situations. Here are some of the most common ones:
If a buyer is getting a mortgage to buy a home, they will almost always include an appraisal contingency in their offer. Lenders have a home appraised to make sure it is worth enough to properly secure the mortgage they’re offering. If the home appraises for less than expected, the lender may demand a higher down payment or refuse to make the loan. An appraisal contingency lets the buyer back out of the purchase if the home appraises too low for their lender to move forward with the loan as expected.
Another common and important contingency for buyers is a title contingency. This lets the buyer back out of the purchase if they conduct a title search and find that the seller doesn’t have clear title to the home or if there are liens against the home that could impact their ownership rights after the purchase.
A home inspection contingency allows buyers to conduct a professional inspection of a property before they purchase it. This can give buyers a heads up on any potential problems and necessary repairs. The contingency may outline the maximum amount that the buyer is willing to pay to repair the home. For example, …….