Meaning of Contingent in Real EstateWhat does contingent mean in real estate sales?
What Does Contingent Mean
One of the most confusing statuses for laymen is the "contingent" status. It is not unusual at all for a potential buyer or seller to ask their agent what does contingent mean. In real estate there are many such terms that can be confusing.
Much of the confusion lies with the fact there is another status that is very similar - which is referred to as pending. We will get into that in a minute but first lets tackle the meaning of contingent.
When buying a home it is not uncommon for buyers to have contingencies in their offer to purchase. Some of the most common contingencies in real estate sales are a home inspection and financing. A home inspection can encompass quite a few things besides just checking the structure. There could be contingencies to check for radon, mold, water quality, and a few others.
Of course, most buyers don't pay cash so there is typically a clause that states a buyer must procure financing. Sometimes in a buyer's market you will also see a home sale contingency added to real estate contracts.
So when you see a property marked as contingent it means there are conditions that need to be met before the sale can proceed to closing. It is not uncommon at all for a sale to fall apart because of one of these contingencies. Home inspections are especially troublesome because many properties have underlying problems that the seller is not aware of.
Real Estate agents generally move properties to pending when they are certain that all of the contingencies have been satisfied. On occasion a real estate agent will move a property right to pending status when they are confident there are going to be no contingencies that will stop the sale.
If you refer to the link to the article above on the meaning of contingent found at Maximum Real Estate Exposure, you will see a very detailed overview. It overs everything you need to think about regarding the contingent status when it comes to buying and selling.
When you are selling a home it becomes especially important to understand the status and how it can impact your sale. In some areas of the country your days on the market will grow when a home is in contingent status which you may not want to happen.
Again by reading the reference all your questions should be answered on the contingent status.