The Definition of Contingent Listings
One term that many consumers ask about is what's referred to as being "contingent". When scanning homes for sale in the multiple listing service (MLS) it is not uncommon to see these homes that are marked contingent. But what is the exact meaning of contingent? The answer is explained quite well in an article written over at the Maximum Real Estate Exposure site.
Essentially a contingent listing is a property whereby an owner has accepted a buyer's offer, however, there are some other events that need to take place that would be acceptable for the buyer to move forward. There are many common contingencies that can be found in real estate contracts.
For example, it is highly likely a buyer will ask for their sale to be contingent on an acceptable home inspection. If the buyer does not like the results they will be able to back out of the sale with no deposit monies lost. Another common contingency in real estate sales is a mortgage clause. The standard mortgage clause says that the buyer will try to obtain a loan for a certain amount of money by a certain date.
If they are not able to procure financing this contingency clause would allow them to escape the sale. These are two of the most common contingencies that would cause a real estate agent to mark a home contingent. So when you see this phrase used in real estate listings online, the meaning of contingent is that the sale may or may not happen until certain events are completed.
When a friend or family member asks you what does contingent mean, you will now know the answer. One other tricky thing is to know the difference between pending vs. contingent. In both instances an offer has been accepted and a contract has been executed between buyer and seller.
Another buyer cannot come along and buy a home out from under the first buyer unless the sale is terminated by both parties. While confusing, it should also be noted that in some states real estate agents will change the listing status to pending even though there are still contingencies that are left to complete.
Pending vs. Contingent: What is The Meaning of ContingentWhat does contingent mean in home sales?