How Long Does a House Stay Contingent?

When a property is listed as “contingent” in real estate, it signifies that a seller has accepted an offer. This status indicates that while an agreement is in place, the transaction is not yet finalized. Instead, the sale’s progression depends on specific conditions being met by either the buyer or the seller, or both, within an agreed-upon timeframe. This temporary state allows for necessary due diligence before the property can move toward a successful closing.

Defining Contingent Status

A contingent status on a house listing means an offer has been accepted, but the sale remains conditional upon the fulfillment of certain prerequisites. These conditions, known as contingencies, are clauses written into the purchase agreement that must be satisfied for the contract to become legally binding and the sale to proceed. While an accepted offer exists, the deal is not guaranteed, and the property is not yet officially sold. This differs from an “active” listing, where no offer has been accepted, or a “pending” status, which usually indicates that all contingencies have been met and the sale is moving closer to closing. The contingent period provides a safety net, allowing parties to withdraw without penalty if conditions are not met.

Key Contingency Types

Real estate contracts frequently include several common types of contingencies designed to protect both buyers and sellers. The financing contingency makes the sale dependent on the buyer securing a mortgage loan within a specified timeframe. This clause ensures the buyer can obtain the necessary funds, allowing them to withdraw without penalty if financing falls through.

The inspection contingency grants the buyer the right to have the property professionally inspected for any significant issues. If the inspection reveals problems, the buyer can request repairs, negotiate price adjustments, or cancel the contract without losing their earnest money deposit. This protects the buyer from purchasing a home with hidden defects.

The appraisal contingency is also a standard protective measure, particularly for buyers using a loan, as it stipulates that the property must appraise for at least the agreed-upon purchase price. Lenders typically only loan up to the appraised value, so if the appraisal comes in low, this contingency allows the buyer to renegotiate the price or terminate the agreement. A home sale contingency makes the purchase of the new property dependent on the buyer successfully selling their current home. This is especially common for buyers who need the proceeds from their existing home to fund the new purchase.

Typical Durations for Contingencies

The duration a house remains in contingent status is determined by the specific conditions outlined in the purchase agreement, with typical timeframes varying for each contingency type. For a financing contingency, buyers are generally allotted between 30 and 60 days to secure loan approval. This period allows sufficient time for mortgage applications, underwriting, and final loan commitment.

An inspection contingency typically has a much shorter window, often ranging from 7 to 14 days after the offer is accepted. The appraisal contingency often runs concurrently with the financing period, usually taking about 7 to 20 days for the valuation to be completed.

The sale of existing home contingency can be the longest, sometimes spanning 30 to 90 days, as it hinges on the successful sale and closing of the buyer’s current property. Contracts with this contingency often include a “kick-out clause,” which permits the seller to continue marketing the home and accept other offers, giving the original buyer a limited time, typically 48 to 72 hours, to remove their contingency or risk losing the deal. These timeframes are negotiated and can be adjusted based on market conditions and mutual agreement.

Actions During the Contingent Period

During the contingent period, both buyer and seller undertake specific actions to fulfill the conditions set forth in their contract. For a financing contingency, the buyer actively applies for their mortgage loan, providing all necessary financial documentation to the lender for underwriting and approval.

Regarding the inspection contingency, the buyer arranges for a professional home inspection within the stipulated timeframe. Following the inspection, the buyer reviews the report and may negotiate with the seller for repairs or credits if significant issues are discovered. Concurrently, for an appraisal contingency, the buyer’s lender orders an independent appraisal of the property to ensure its value supports the loan amount.

If a home sale contingency is in place, the buyer focuses on actively marketing and selling their current residence within the agreed-upon period. Throughout this entire contingent phase, effective communication among buyers, sellers, real estate agents, and lenders is paramount to addressing any emerging issues and ensuring all conditions are met efficiently.

Outcomes When Contingencies Are Not Met

If contingencies outlined in a real estate contract are not met within the agreed-upon timeframe, the deal typically faces significant consequences. In such cases, the buyer usually has the right to back out of the contract without losing their earnest money deposit. This protection is a primary benefit of including contingencies in the purchase agreement.

Conversely, if the buyer defaults on the contract for reasons not protected by a valid contingency, the seller may be entitled to keep the earnest money deposit. When a contingency fails, and no alternative agreement is reached, the property will generally return to an “active” status on the market, allowing the seller to seek new offers. Both parties can attempt to renegotiate terms or extend deadlines to keep the deal alive, but ultimately, an unmet contingency provides a clear path for contract termination.