What Does It Mean When a Property Is Listed as Contingent?

When navigating the real estate market, you will likely encounter various property statuses, one of which is “contingent.” This status signifies that a property has an accepted offer, but the sale is not yet finalized because specific conditions, known as contingencies, must be met. A contingent listing serves as a bridge between an active listing and a fully sold property, indicating that while a deal is in progress, it remains subject to certain requirements.

Understanding Contingent Status

A property listed as contingent means that a buyer and seller have agreed to a purchase contract, but its completion hinges on certain predefined conditions being satisfied within a specified timeframe. These conditions are typically included in the sales contract to protect either the buyer or the seller, allowing them to withdraw from the agreement without penalty if the conditions are not met.

Several common types of contingencies frequently appear in real estate contracts. An inspection contingency allows the buyer to conduct a professional home inspection to identify any significant issues with the property. If problems are found, the buyer can negotiate repairs, request a credit, or even terminate the contract. An appraisal contingency protects the buyer, especially those using a mortgage, by ensuring the property’s value, as determined by an independent appraisal, meets or exceeds the agreed-upon purchase price. If the appraisal comes in lower, the buyer may renegotiate the price or withdraw from the deal.

Another prevalent condition is the financing or mortgage contingency, which permits the buyer to cancel the contract if they are unable to secure the necessary loan approval to purchase the home. A home sale contingency means the buyer’s ability to purchase the new property is dependent on the successful sale of their current home, typically within a set period. Lastly, a title contingency ensures that the seller has clear legal ownership of the property and that there are no undisclosed liens or disputes that could affect the transfer of title.

Navigating a Contingent Listing

During the contingent period, various activities unfold to fulfill the agreed-upon conditions. This typically involves scheduling and completing the home inspection, arranging for the property appraisal, and processing the buyer’s loan application. The duration for these activities can vary.

For other interested buyers, a contingent listing might still present an opportunity. While an offer has been accepted, the sale is not guaranteed, and deals can fall through if contingencies are not met. In such cases, a potential buyer can often submit a “backup offer.” A backup offer is a legally binding contract that positions a new buyer to purchase the home if the initial contract fails.

From the seller’s perspective, accepting an offer with contingencies provides a degree of security regarding the buyer’s ability to complete the purchase, while also allowing for critical due diligence. Some contingent contracts may include a “kick-out clause,” particularly with a home sale contingency. This clause permits the seller to continue marketing the property and accept other offers. If a stronger offer emerges, the seller can then give the original contingent buyer a short timeframe, often 24 to 72 hours, to either remove their contingency and proceed or forfeit their claim to the property.

Distinguishing Other Property Statuses

Understanding “contingent” also involves differentiating it from other common property statuses seen in real estate listings. When a property is “active,” it means the home is currently available for sale, has no accepted offers, and is open for viewings and new offers. This is the initial stage where buyers have the most direct access to making an offer without existing commitments.

The “pending” status indicates that an offer has been accepted, and all, or nearly all, contingencies have been met or waived. At this stage, the sale is much closer to completion, with the transaction primarily awaiting final paperwork, title searches, and the closing date.

The term “under contract” is sometimes used as a broad umbrella term that can encompass both “contingent” and “pending” statuses, depending on the local real estate board’s specific terminology. It generally signifies that a seller has accepted an offer, and the property is no longer actively being marketed for new bids. However, some multiple listing services (MLS) might use “active under contract” to specify that while an offer is accepted with contingencies, the seller is still open to backup offers. Finally, “sold” or “closed” means the transaction is complete, ownership has officially transferred from the seller to the buyer, and the property is no longer on the market.