When you’re buying or selling a home, you’ll often see the word contingent in listings or status updates. But what exactly does contingent mean, and how can it impact your real estate transaction? Below, we’ll break down the term, how it applies to real estate, and what you can expect when a property goes under a contingent contract.
What Does Contingent Mean?
At its simplest, contingent means that something depends on or is conditioned by something else happening first. In everyday language, you might say, “My plans are contingent on the weather,” meaning they’ll only happen if the weather cooperates.
What Does Contingent Mean in Real Estate?
In real estate, contingent describes a home sale where the seller has accepted an offer, but the deal isn’t yet final. Instead, it hinges on certain conditions—called contingencies—that must be satisfied before the transaction can proceed to closing. If those conditions aren’t met, the house could become available for sale again and the buyer can get out of the contract without penalty.
These contingencies are designed to protect both the buyer and the seller. The most common contingencies are designed to protect buyers. For example:
- Home Inspection Contingency – The buyer can have the home professionally inspected. If significant issues are found, the buyer can negotiate repairs, request a credit, or even walk away without penalty. The way this is structured can vary widely depending on which state or jurisdiction you are in.
- Financing Contingency – The sale depends on the buyer securing their mortgage. If the loan falls through, this contingency allows the buyer to exit the contract.
- Appraisal Contingency – The home must appraise at or above the purchase price for the lender to approve financing. If the appraisal comes in low, this contingency provides options for renegotiation or getting out of the contract.
A home stays in contingent status for the amount of time specified for these contingencies. Once all contingencies have been satisfied or waived, or the deadline is up, the buyer can no longer void the contract without penalty and the sale is firm. Each state and jurisdiction has its own rules for how these are structured, so it’s always important to consult with a local and experienced Realtor.
If you are looking to get out of a contract, you should consult an attorney.
Do you have more real estate questions you need answered? Here are a few more posts you might find helpful:
- How to Negotiate as a Homebuyer: Strategies and Expectations
- Should You Listen to Your Friends When it Comes to Real Estate?
- What to Expect on Closing Day as a Buyer or Seller
How Long Does a House Stay in Contingent Status?
The timeframe for a home to remain contingent varies based on several factors, including:
- The complexity of the contingencies
- The responsiveness of the parties involved
- The local real estate market and contract norms
A contingency period could be as short as a day for a home inspection contingency or a month for a financing contingency. It depends on numerous factors, making it challenging to provide a general rule of thumb without considering a specific scenario. For example, a straightforward transaction with cash financing may clear contingencies in less than a week (or include no contingencies at all which is also common), while a purchase that requires multiple inspections or extended loan approval can take longer.
What Does Active Contingent or Active Under Contract Mean?
Sometimes you’ll see a listing marked as active contingent or active under contract. This means the seller is still accepting backup offers while the original contract is in place. In other words, the primary offer has contingencies to clear, and if the buyer fails to meet those conditions, the seller may move on to another interested buyer. This is generally only the case for certain types of contingencies, such as when a buyer has a home sale contingency. These are not very common in the DC area market, but they do sometimes happen!
Looking for more resources to help you buy or sell? Download our free guides right here:
The Bottom Line
Seeing contingent on a listing doesn’t necessarily mean you’ve missed your chance. If you’re interested in a contingent property, your real estate agent can help you determine whether submitting a backup offer is a good idea and guide you through the process.
If you have questions about buying or selling a home—or how contingencies might affect your move—we are always here to help. Reach out any time; we’d love to be your resource and guide you every step of the way.
Get in touch by filling out the form below or reaching out by phone or email.
Sue Goodhart | sue@thegoodhartgroup.com | 703-362-3221
Allison Goodhart DuShuttle | allison@thegoodhartgroup.com | 703-266-7277
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