If you’re buying or selling a home, you’ve probably heard the term “contingent” or “contingent sale.”
So What is a Contingent Sale?
A contingent sale can be a challenging thing to handle, but they’re manageable if navigated properly. As a real estate term, a contingent sale can sometimes mean that a buyer is unable to purchase a property without selling one they already own due to financing, or it could be based on other contingencies too. A contingent sale is not the same as a pending sale.
So what exactly are these contingencies? They’re the clauses in your contract that give you an out if something unforeseen or unexpected arises. A contingency can sometimes mean that a buyer is unable to purchase a property without selling one they already own due to financing. But more often than not, it means there are certain things the seller must meet/improve/etc with the house before the sale moves on up to pending – i.e. the buyer’s offer is contingent on the seller completing these tasks. They can also help protect you from losing your earnest money and can give you leverage to get the seller to help you deal with whatever comes up. As a buyer, contingencies are great. On the flip side, sellers aren’t so fond of them for obvious reasons. That’s why, in a very competitive market, you might need to avoid them.
Are Contingent Offers Good?
There is no right or wrong answer on this one. Every situation is different. While contingent offers can pose additional risk, there are times when it makes sense for a buyer and a seller. Talk with your agent to understand what the contingencies are and what the extra steps will be to bring you to a smooth closing.
Sometimes a seller will chose to keep a home on the market after accepting a contigent offer. This is called active contigent. The reason a seller will do this is to continue to get back up offers in case the contigent offer falls apart.
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