what does contingent mean in real estate

In real estate, “contingent” refers to a property that is under contract, but the sale is dependent on certain conditions or contingencies being met.

These contingencies are specified in the purchase agreement, and if they are not satisfied, the buyer or seller may have the option to cancel the deal without penalties.

Common Types of Contingencies:

1. Financing Contingency: The buyer must secure financing (e.g., a mortgage) within a specified period. If they cannot obtain a loan, the deal can be canceled.
2. Inspection Contingency: The property must pass a home inspection to the buyer’s satisfaction. If major issues are discovered, the buyer can negotiate repairs, request a credit, or back out of the deal.
3. Appraisal Contingency: The property must appraise at or above the purchase price. If the appraisal comes in lower, the buyer can renegotiate the price or cancel the contract.
4. Sale of Buyer’s Property Contingency: The buyer must sell their current home before completing the purchase of the new one.
5. Title Contingency: Ensures the property has a clear title without liens or disputes. Any title issues must be resolved before closing.

A “contingent” status means the seller is still technically accepting offers, but the current buyer has the first right to proceed if all contingencies are fulfilled. If contingencies are not met, the property might return to the market.

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