Many home buyers find house hunting stressful and exciting. What happens if you find a house that you like but it is listed as “contingent?”
This article will explain what a contingent home is, how it affects buyers, and what common home statuses may be encountered during the purchase process.
What does Contingent mean in real estate?
Let’s first define “contingent” in terms of a home on the market.
A contingent house listing is when an offer has been made on a home and accepted by the seller. The home is now under contract. Several criteria must be met before final sales can proceed. These are clauses that can be included in the sale contract and may include things such as appraisal, home inspection, or mortgage approval.
A house cannot be listed contingently if the homeowner does not accept the offer of the buyer. The condition is that the transaction can only take place after certain conditions have been met. Which contingency will be listed on the purchase agreement depends on the buyer’s requirements.
Here are some of the most popular contingencies that you can use to make your offer to a potential buyer.
- Appraisal contingency
- Financing contingency (also known as a mortgage contingency).
- Home inspection contingency
- Home sale contingency
- Title contingency
A contingency clause in an offer can help you protect yourself from the potential risks of buying a house. If you are unable to secure a home and the inspector discovers foundation problems, the home inspection contingency could be used to cancel the contract and get your earnest cashback.
It may be tempting to add as many contingencies to your offer as possible. Sellers don’t like long lists of conditions, especially in a highly competitive housing market. You should instead use contingencies sparingly, and only when it makes sense for you.
A real estate agent can help you decide which contingencies to use if you are unsure. A real estate agent can help you prepare your bid and make recommendations for making your offer more attractive.
Can you make an offer on a contingent house?
You can make an offer on contingent houses. The nature of a contingent offer may be more complicated than you think. There is always the possibility of another buyer interested in the contingent house if the sale fails to go through with the original buyer. You might also consider making a strong backup proposal to the seller.
Types of contingent statuses
Contingent houses may exist under a variety of statuses, which can make them “contingent.” Multiple listing service (MLS), is a real-estate marketing and advertising company that allows home buyers to browse online listings. The MLS may use different terminology to describe contingent statuses. We’ll explain these terms below.
Contingent: Continue To Show (CCS).
A home is considered Contingent Continue To Show if it has been accepted by an offer. However, there are many contingencies that the seller must address. The buyer is currently working to resolve these contingencies. However, other buyers are welcome to continue viewing the listing and submitting offers.
Contingent: No Show
Contrary to a CCS status sellers will no longer accept offers or show the house after they have accepted an offer with conditions. The status of the house will change to pending once the buyer has addressed these contingencies.
Contingent: with Kick-Out
A kick-out clause in a contingent status means that the buyer must meet all contingencies by a certain date. The seller may continue showing the house and accepting bids during this period.
Contingent: No Kick-Out
The buyer has no deadline to fulfill their contingencies if they are in a no-kick-out contingent position. The seller cannot accept a lower offer, even if it is made.
Short Sale Contingent
A short sale is when the seller accepts less than the mortgage amount. Short sale contingent status allows other agents to know that the property is no longer available for sale due to an accepted offer. This does not necessarily mean that the homeowner’s lender has approved the purchase.
When dealing with an estate following a death, probate is common. In contingent probate, the lawyer will be paid a percentage of the estate to complete the process.
Real Estate Terms: Contingent Vs. Pending
These terms can be used in different ways, but you might have heard the terms contingent and pending interchangeably when describing a listing. An active contingent status is when the seller accepts an offer, but doesn’t meet the buyer’s requirements.
A listing must change from contingent to active to become pending. The seller must accept an offer and address all contingencies and criteria. Pending deals, unlike contingent listing, are not considered active. The home will be in a pending state until all legal work has been completed.
The bottom line
You can submit an offer if you fall in love with a contingent house. Keep in mind, however, that you may have to go through a more difficult home buying process or use contingencies to secure your deposit. Before proceeding, we recommend that you discuss all possible outcomes with your agent.
To learn more about Gary Kevin Coats please visit https://www.kevincoats.com/