How Long Do Houses Stay Contingent?

When a home is listed as contingent, an offer has been accepted, but the sale is not yet finalized. This status indicates that specific conditions, known as contingencies, must be met before the transaction can proceed to closing. It signifies that while a deal is in motion, it is dependent on further actions or outcomes.

Understanding Contingent Status

The term “contingent” in real estate signifies that an accepted offer is in place, but the sale remains conditional upon specific criteria outlined in the purchase agreement. This differs from an “active” listing, where a property is still available and seeking offers. A “pending” status, conversely, indicates that all contingencies have been met or waived, and the transaction is moving directly toward closing, with the property no longer shown to other potential buyers. A contingent status provides a buyer with an opportunity to withdraw from the contract without penalty if these conditions are not fulfilled.

Several types of contingencies are commonly included in real estate contracts. An inspection contingency allows the buyer to conduct a professional home inspection to identify any issues with the property’s condition. If significant problems are found, the buyer can negotiate repairs or credits, or withdraw from the agreement. An appraisal contingency protects the buyer if the home’s appraised value is less than the agreed-upon purchase price, as lenders will not finance more than a home’s appraised value. This clause enables the buyer to renegotiate the price or terminate the contract if an appraisal gap exists.

A financing or loan contingency allows the buyer to withdraw from the contract and retain their earnest money if they cannot secure the necessary mortgage financing within a specified timeframe. This provision protects buyers from being bound to a purchase they cannot afford if their loan application is denied. A sale of current home contingency makes the purchase dependent on the buyer successfully selling their existing property, providing protection against owning two homes simultaneously. These conditions ensure buyers have protection if unforeseen circumstances arise during the transaction.

Factors Determining Contingency Duration

The length of time a house remains in contingent status is not fixed and varies based on the specific contingencies included in the contract and their negotiated timelines. These durations are agreed upon by both the buyer and seller in the purchase agreement. The inspection contingency, for instance, spans 7 to 14 days, allowing time for scheduling a professional inspection, reviewing the report, and negotiating any necessary repairs or credits. Some agreements might specify a shorter period, such as 5 to 10 days, particularly in competitive markets.

The appraisal contingency ranges from 2 to 4 weeks. This period accounts for the lender ordering an appraisal, the appraiser’s visit to the property, and the time needed to process and deliver the valuation report. If the appraisal comes in low, additional time may be required for renegotiation between the parties or for the buyer to decide on alternative financing.

The financing, or loan, contingency is the longest contingency period, lasting between 30 and 60 days. This extended timeframe accommodates the comprehensive process of loan underwriting, documentation submission, and final approval from the lender. While a buyer might be pre-approved, the full underwriting process can uncover issues that delay or prevent final loan approval.

A contingency for the sale of a current home can be highly variable, extending from 30 to 90 days or even longer, depending on how quickly the buyer’s existing property sells. This type of contingency is less appealing to sellers due to its unpredictable nature and potential for prolonged delays. Market conditions, the responsiveness of all parties involved—including buyers, sellers, lenders, and inspectors—and the complexity of the property or loan can all influence the overall duration of the contingent period.

Navigating the Contingency Period

During the contingent period, active participation from both buyers and sellers, guided by their real estate agents, is important to ensure conditions are met within agreed-upon deadlines. Buyers begin by scheduling inspections, like a general home inspection, immediately after the offer is accepted. They also work on securing their loan, which involves submitting all required financial documents to the lender and coordinating the appraisal. Following the inspection, buyers review the findings and may submit requests for repairs or credits to the seller.

Sellers must grant access to the property for inspections and appraisals. They review any repair requests from the buyer and engage in negotiations to resolve these issues, which might involve agreeing to repairs, offering credits, or adjusting the sale price. Sellers also cooperate with lender requests, providing any necessary disclosures or documentation to facilitate the buyer’s loan approval. Clear communication between all parties is important to manage expectations and address any emerging issues promptly.

Real estate agents play a central role in managing this phase, acting as facilitators between buyers and sellers. They coordinate appointments, ensure all contractual deadlines are met, and assist in preparing necessary addendums or notices. Agents help to streamline communication, ensuring information flows efficiently and that both parties understand their obligations and the progress of each contingency. This coordinated effort helps to navigate the complexities of the contingent period, aiming for a smooth transition towards a final sale.

Outcomes After Contingency

Once the contingency period concludes, the status of the home sale will transition based on whether the outlined conditions have been successfully met. If all contingencies are satisfied and formally waived by the buyer, the property moves from “contingent” to “pending” or “under contract” without contingencies. This change signifies that the sale is firm and is progressing toward the final closing steps, with the property removed from active marketing. At this stage, the likelihood of the deal falling through significantly decreases, as the major hurdles have been cleared.

Conversely, if one or more contingencies cannot be met, various outcomes are possible. For instance, if a home inspection reveals significant issues and the buyer and seller cannot agree on repairs or price adjustments, the buyer may legally withdraw from the contract. Similarly, if the appraisal comes in too low and no renegotiation occurs, or if the buyer’s financing falls through, the contract can be terminated. In such cases, the property returns to an “active” status on the market, allowing the seller to seek new offers.

When a contract is terminated due to an unmet contingency, the buyer retains their earnest money deposit, provided they followed the terms of the contract and withdrew within the specified timeframe. This protection is a primary purpose of contingencies, safeguarding the buyer’s initial good-faith deposit. For the seller, the outcome of an unfulfilled contingency means their home re-enters the market, potentially causing delays in their selling plans. The contingent status thus serves as an important, temporary phase that resolves into either a solidified sale or a return to market availability.