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Chris Whitehead/Getty Images May 20, 2022 TJ Porter is a contributing writer for Bankrate. TJ writes about a range of subjects, from to . Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Bankrate logo

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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo

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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. If you’re in the market to , you probably spend a lot of time looking at listings. In your search, you might come across home listings listed as “contingent.” Does that mean they’re not for sale anymore? Read on to learn what contingent listings are, and whether you should get your hopes up over these homes.

What does contingent mean in real estate

In general, contingent means “depending on certain circumstances.” In the world of real estate transactions, it means the sale depends on the contract’s contingencies being met. A contingent listing is one where the seller has accepted an offer, but is opting to keep the listing active while they make sure all conditions are properly met. If the contractual conditions are met — both by the buyer and the seller — the sale will go through. But if an issue comes up, one or the other party may have the right to . In this case, a contingent-listing home might return to the market and become available for purchase again.

What are common contingencies in real estate

Real estate transactions can involve massive amounts of money, so both buyers and sellers want to make sure that there aren’t any surprises waiting for them at the finish line. Both parties can include in the transaction to protect themselves from unexpected situations. Here are some of the most common ones:

Appraisal

If a buyer is to buy a home, they will almost always include an in their offer. Lenders have a home appraised to make sure it is worth enough to properly secure the mortgage they’re offering. If the home appraises for less than expected, the lender may demand a higher down payment or refuse to make the loan. An appraisal contingency lets the buyer back out of the purchase if the home appraises too low for their lender to move forward with the loan as expected.

Title

Another common and important contingency for buyers is a title contingency. This lets the buyer back out of the purchase if they conduct a title search and find that the seller doesn’t have clear or if there are liens against the home that could impact their ownership rights after the purchase.

Home inspection

A home inspection contingency allows buyers to conduct a professional inspection of a property before they purchase it. This can give buyers a heads up on any potential problems and necessary repairs. The contingency may outline the maximum amount that the buyer is willing to pay to repair the home. For example, it could allow them to back out of the purchase if expected repair costs exceed $10,000. In hot real estate markets, buyers who are facing stiff competition sometimes . But it’s typically standard.

Mortgage

Even if a buyer gets for a loan, there’s always a chance that something will come up and cause their deal with the lender to fall through. Mortgage contingencies let the buyer off the hook if they get denied for a loan despite making reasonable attempts to get approved.

Home sale

If the buyer already owns a home, they might plan to use the proceeds from . Buyers in this situation can include a contingency in their offer so that the new purchase will only go through in the event that they sell their previous home by a certain date.

New housing

Sellers also need somewhere to live after they leave their current house. Sellers who haven’t found their next home yet can accept an offer, but add a contingency that allows them to back out of the sale if they aren’t able to find a new place to live by a certain date.

What is an example of contingent

Here’s an example of a real estate contingency: A buyer offers to purchase a home for $400,000, making an $80,000 down payment. They include an appraisal contingency, stating that the house must appraise for at least that amount, and an inspection contingency, limiting expected repair costs to $15,000. The offer is accepted, and the contract is signed. If the appraisal comes back for $400,000 or more, and the inspection shows no major issues, the sale can go through. However, if the home appraises for less than $400,000, or the inspection identifies more than $15,000 in necessary repairs, the buyer can back out of the contract or amend their offer.

Types of contingent statuses

Here are a few different types of contingent listings that you might see on the market.

Contingent Continue to show

This means that the seller has accepted an offer with contingencies, but wants to continue showing the home to other potential buyers in case the offer falls through.

Contingent No show

The seller has accepted an offer and does not wish to continue showing the home to other potential buyers. This typically means that the offer has few contingencies or contingencies that are unlikely to be problems.

Contingent With kick-out

The seller can opt to back out of the offer they’ve accepted if the attendant contingencies are not met by a certain deadline.

Contingent With no kick-out

The seller has accepted an offer with contingencies, and has not set a deadline for them to be met. In this case, the process may take longer, because the buyer is in no rush to fulfill all the contingencies.

Short sale contingent

A listing that is short sale contingent means that the seller has accepted an offer and is willing to sell the home for less than the amount that they owe to their mortgage lender. can take a long time to complete because the lender is involved. In these cases, the seller reserves the right to receive backup offers in case the current offer falls through.

Contingent probate

Probate is the legal process through which the courts administer the assets of someone who has died. As in short sale contingent listings, sellers of have accepted an offer, but the difficulty of the transaction due to the probate process means they’re looking for backup offers.

What s the difference between contingent and pending

Contingent and are similar statuses, but there are essential differences. Put simply, an accepted offer that has contingencies begins as contingent. Once those requirements are met, the offer moves to pending. An offer that is pending is much closer to closing than one that is contingent, so it’s usually not worth looking at pending listings.

How long does it take to go from contingent to pending

This time frame varies widely from one transaction to another. A deal with fewer contingencies will likely move faster than one with many. And a deal with no kick-out clause may take particularly long, because there is no deadline set for the buyer to meet all necessary criteria.

FAQ

Is it worth it to look at a house that is contingent

Most accepted offers do eventually become sales, but you never know. It is still worth looking at a home listing that is contingent — especially if the listing agent is still actively showing it. That can indicate an expectation that the accepted offer might fall through.

Can you still put an offer on a house that is contingent

Yes, you can still make an offer on a home that is a contingent listing. Depending on the type of contingency, the seller might back out and accept your offer. At a minimum, it puts you at the front of the line if the sale falls through.

How do you beat a contingent offer

It’s not always possible. But, in general, the fewer contingencies that you place on your offer to buy a home, the more competitive your offer will be.

How often do contingent offers fall through

Not very, but it does happen. According to the National Association of Realtors, about 5 percent of real estate transactions fall through before closing.

Can a seller back out of a contingent offer

Yes, if the contingencies aren’t satisfied. They can back out in other situations as well, but there could be financial consequences if they back out without a good reason.

Bottom line

If you’re looking at contingent listings, work with your Realtor to identify what the contingencies are and whether it’s worth trying to make an offer. While the odds are against you, there’s still a chance that the sale could fall through and you’ll have the opportunity to buy the home.
SHARE: TJ Porter is a contributing writer for Bankrate. TJ writes about a range of subjects, from to . Michele Petry is a senior editor for Bankrate, leading the site’s real estate content.

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