What does contingent mean in real estate

What Does Contingent Mean In Real Estate?

What does contingent mean in real estate? If you're asking this question, you'll need more information than just the definition. Read this post to get to know about the term “contingent”.

December 24, 2021

What does contingent mean in real estate? If you’re asking this question, you’ll need more information than just the definition. You should understand how the term “contingent” might affect the selling of your house. Because it is possible.

It’s the most common cause for a real estate listing to fall through after a contract has been signed. We’ll tell you all you need to know to minimize your chances of this happening to you.

Here’s what you’ll learn:

  • What Does Contingent Mean in Real Estate?
  • What Should You Expect From a Contingent Home?
  • Is it possible to make a contingent offer on a home?
  • What exactly is the difference between pending and contingent?
  • How often do contingent offers fall through?
  • Do I have to agree to a buyer’s contingencies as a seller?
  • When a house switches from active to contingent, what does that mean?
  • The Meaning of Contingent: Key Takeaways

Let’s dive in! In this post, RealEstate-Prep will show you more beneficial information!

What does contingent mean in real estate

What Does Contingent Mean in Real Estate?

You may have come across a number of various sales statuses online when looking for a house for sale, including contingent real estate listings. You may have encountered other typical sales statuses such as “pending” or “contingent” in addition to “for sale” and “closed.” These terms describe where the home is in the sales process. Understanding the variations between these statuses will assist you in identifying properties that may still be available for purchase, as well as how to proceed if you decide to make an offer on any of them.

So what is contingent in real estate? The status “contingent” or “pending” implies that the home’s owner has accepted an offer subject to specific conditions from a possible buyer. Contingencies are requirements that must be met by either the buyer or the seller (or both) in order for the transaction to close. For example, a buyer may make an offer on a property, but it is conditional on the buyer first selling their present home or securing financing. During the due diligence step, the buyer will also want to confirm that the property is in excellent working order. A home identified as contingent may ‘fall through’ for a variety of reasons.

Read more: What Does Pending Mean in Real Estate?  

What Should You Expect From a Contingent Home?

In real estate, there are several types of contingencies, each with its own set of obligations and requirements. Besides understanding the real estate contingent definition, knowing what type of contingency you’re dealing with can help you determine how likely the house is to be sold. Both the buyer and the seller have contractual duties after a contract is accepted, and only the buyer can back out at that time. There is no way for the seller to accept another offer. However, it is still possible for a deal to fall through.

Most purchasers will get a mortgage pre-approval letter from a lender before submitting an offer, which will let them know whether or not they qualify for a loan before putting an offer on a house.

This pre-approval letter does not imply that the buyer’s information is completely accurate, and the mortgage contingency is frequently the reason a buyer is forced to walk away from a house. The pre-approval letter may be worthless if the buyer lies about their assets, income, or whether or not they have paid the previous year’s taxes. With interest rates so low, most people can find methods to qualify for a house loan; however, when the market turns and interest rates increase, you’ll see a lot more contingency contracts fall through!

When a buyer already has a contract in hand and a closing date set for their current house, a contingency comes into play. Because the property does not become sold until the closing, the contingency protects the buyer in the event that the transaction falls through for any reason. Because of contractual duties, this form of contingency prevents the seller from considering other offers on the property for a set period of time.

The seller may accept backup offers even if the house is marked contingent.

What does contingent mean in real estate

Is It Possible To Make A Contingent Offer On A Home?

Other purchasers will be able to make offers on most contingent properties. This is because contingent transactions are still technically live listings that can be terminated if the buyer fails to satisfy the contract’s requirements. If the buyer’s contingency is based on their ability to sell their present property, for example, the seller will almost certainly examine alternative offers if the buyer is unable to sell their current home.

If all goes well and the buyer is able to sell his or her house, the contingent transaction will be changed from “contingent” to “pending.” There is a danger, though, that the seller will be unable to sell their home.

If the seller receives a second offer while the house is still on the market, the seller will contact the first potential buyer and give them a certain length of time to remove the condition – usually 24 to 48 hours. Even if the buyer’s present property has not been sold, the first buyer will have the option to remove the condition and purchase the home. If they are unable to acquire the home until their present home sells (or if they fail to fulfill any other requirement), the seller may proceed with the second buyer.

If you’re a buyer and find a house you like with a contingent listing, talk to your real estate agent about making an offer. If the seller accepts your offer, the original potential buyer will be obliged to proceed with the purchase without the contingencies in place, or the house will become available for you to purchase.

What Exactly Is The Difference Between Contingent Vs Pending?

When a house is “under contract,” which means the owner has accepted a buyer’s offer and both parties have agreed to the transaction, both contingent and pending sales statuses appear. They do, however, represent various stages in the home-buying process. This is how the two vary from one another.

  • Contingent: A homeowner has made an agreement with a buyer for the sale of a property with a contingent offer, but the transaction is subject to one or more conditions before it is completed. When a home is under contract, contingencies will arise. A contingent offer indicates that the transaction is proceeding, but that other offers may be accepted.
  • Pending: When a property is classified as “pending” or “sale pending,” it signifies that the buyer and seller are extremely close to finalizing their agreement. A pending status sale indicates that all conditions have been met and the terms of the buyer and seller’s real estate contracts have been fulfilled. A pending house sale might still fall through, but real estate brokers are less likely to accept an offer on a pending property than they would on a contingent or under-contract property.

Learn how to distinguish between pending and contingent in real estate in Contingent vs Pending: What Is The Difference?

How Often Do Contingent Offers Fall Through?

According to The Lender’s Network, the average closing time for a new property is 46 days, despite the fact that the MLS (multiple listing service) does not disclose information on how many contingents offers fall through each year. Knowing how long it takes to close on a house, there are a number of reasons why a contingent offer could not close within that period. The following are some examples of common contingencies:

Appraisal contingency: An appraisal contingency is typically used by a buyer to guarantee that they are not overpaying for a home. If the house doesn’t appraise for the same amount as the sellers are asking, the buyer has the option of requesting a lesser price, asking the seller to pay the difference in cash, or walking away from the sale entirely. Real estate may be negotiated in a variety of ways.

Home inspection contingency: If the home inspection reveals multiple concerns, such as roofing issues, plumbing difficulties, structural issues, electrical inadequacies, and other serious issues, the buyer can impose a contingency requiring that those issues be addressed. Alternatively, they might ask for the price to be reduced. The buyer will have the option to back out of the transaction if the difficulties are not resolved or the price is not decreased. After the house has been examined, there are a variety of options for negotiating the price.

Further inspection clauses: The buyer may request additional inspections, such as radon testing, well water testing, mold testing, and lead paint testing.

Sale contingency: It’s normally better to sell a home before purchasing another, but finance and timing aren’t always ideal. A house sale contingency provides the buyer a fixed amount of time to sell and settle on their present home in order to pay for the new one. If the buyer’s existing house does not sell, this form of contingency protects them by allowing them to pull out of the deal without facing legal consequences.

Financial contingency: This is one of the most prevalent contingencies that many sellers may face, especially because 88% of purchasers finance their property purchases with a loan. After a buyer submits an offer on a property, a lot of things may happen that could impact whether or not they are accepted for a loan, such as taking on new debt or losing or changing employment. Mortgage lenders might sometimes refuse to lend to purchasers who have a lot of debt or liens against them.

What does contingent mean in real estate

Do I Have To Agree To A Buyer’s Contingencies As A Seller?

Contingencies are not needed by sellers, but refusing to accept them may diminish your chances of finding a buyer. If the buyer is unable to include stipulations in their offer, they may be compelled to look for other properties or will be unable to make an offer at all.

When A House Switches From Active To Contingent, What Does That Mean?

When a listing status is “active,” the home has not yet received any accepted offers, and buyers are welcome to visit the property and submit an offer. The home is still legally in an active position when the status goes from “active” to “contingent,” because other offers can still be made on the property, depending on how the contingency agreement is constructed by the buyer and seller. The house, on the other hand, is under contract and might be closing soon.

So, if you’ve been admiring a property that’s been active for a few weeks and sees it’s been moved to contingent, you may probably still make a backup bid on it. Keep in mind that the first buyer who made an offer on the house will have first dibs since they will be able to remove the contingency and proceed with the purchase. You will have the option to continue forward with the home if they are unable to eliminate the contingencies.

The Meaning Of Contingent: Key Takeaways

When looking for a property to buy or preparing to sell your home, it’s important to understand the numerous stages that a home transaction might go through before achieving closing status. While making a contingent offer exposes the buyer to the risk of not acquiring the property, it does give them time to sell their present house, arrange financing, and so forth. Before making an offer on a house, especially one with contingencies, always speak with your real estate agent.

Homes in desirable areas rarely last long, and once under contract, they are marked as ‘contingent.’ If you have your heart set on this home, submit a backup offer so that in the unusual event that the contract falls through, you will have first dibs on the property.

You could now be able to answer the question, “What does contingent mean in real estate?”.


Can a seller accept other offers while their property is in contingent status?

In most cases, sellers can continue to show their property and accept backup offers while it is in contingent status. If the initial offer falls through, the seller can move on to the backup offer.

How long does a contingent status typically last?

The duration of a contingent status can vary depending on the agreed-upon timeline and the specific contingencies involved. It can range from a few days to several weeks, allowing the buyer to fulfill the conditions outlined in the contract.

What happens if the contingencies are not met?

If the contingencies are not met within the specified timeframe, the buyer may have the option to back out of the contract without penalty. However, this may vary depending on the terms outlined in the purchase agreement.

Can a contingent property still be shown to potential buyers?

Generally, a contingent property can still be shown to potential buyers. It allows the seller to receive backup offers in case the initial offer falls through.

Can a buyer make offers on multiple properties while their offer is contingent?

It is possible for a buyer to make offers on multiple properties while their offer is contingent. This allows them to have alternative options in case the contingency is not met or if they decide to pursue a different property.


Real estate contingencies can have a significant influence on the transaction. Both the buyer and the seller are nearly always concerned with price, but contingencies are a close second. They’re the most common cause for a home’s sale to fall through. This is why it’s crucial to know what questions to ask a realtor when selling your home.

The greatest ones aren’t simply good at negotiating; they also know the intricacies of each contingency and how to avoid them from derailing your property sale. Not only focus on the continent, but you also need to pay attention to other needed things. To gain solid knowledge about this real estate field, let’s get started with our Real Estate practice exam.