When reviewing property listings, the status “Contingent” indicates that a seller has accepted an offer from a buyer. This designation means the sale is provisionally accepted but not yet finalized, as the contract is dependent upon specific conditions being satisfied. This conditional stage provides a period for both parties to confirm that the transaction can move forward.
What the Contingent Status Means
The contingent status represents an intermediate stage in the home sale process, signifying that a signed purchase agreement exists between the buyer and the seller. The contract’s execution is strictly conditional upon the successful fulfillment of certain stipulations, referred to as contingencies. These conditions must be met or waived by the buyer within the timeframe specified in the contract. If a contingency fails—for example, if a major defect is discovered—the buyer has the right to terminate the contract and recoup their earnest money deposit. This status keeps the property technically off the open market while the parties work to secure the conditions of the sale.
The Most Common Contingencies
These conditions are standardized clauses inserted into the purchase agreement, functioning as safeguards that allow the buyer to withdraw from the deal if specific outcomes are not met. The most frequently used contingencies address the property’s physical condition, its financial valuation, and the buyer’s ability to secure funding.
Inspection Contingency
The inspection contingency grants the buyer the right to hire a professional home inspector to evaluate the property’s condition. This condition protects the buyer from inheriting significant, undisclosed maintenance issues or structural defects. If the inspection reveals unsatisfactory problems, the buyer can negotiate repairs, request a price reduction, or terminate the deal. This due diligence must be completed within a specific window, often 7 to 14 days after the contract is signed.
Appraisal Contingency
The appraisal contingency ensures that the home’s fair market value, as determined by a licensed appraiser, supports the agreed-upon purchase price. Lenders require this condition because they will only finance a mortgage up to the appraised value. If the appraisal comes in lower than the sales price, the buyer can renegotiate the price, pay the difference in cash, or terminate the contract without penalty.
Financing Contingency
The financing contingency, sometimes called a mortgage contingency, makes the sale dependent on the buyer securing the necessary loan funds. This clause allows the buyer a specified period to receive a formal loan commitment from their financial institution. This commitment is a binding confirmation that the lender will provide the money, pending final closing details, and differs from a pre-approval. If the buyer is unable to secure the loan commitment, the contract usually becomes void.
Sale of Existing Home Contingency
The sale of existing home contingency protects a buyer who needs the proceeds from their current residence to purchase the new property. This condition stipulates that the purchase agreement is valid only if the buyer successfully sells their existing home by a specific date. Sellers view this contingency as the riskiest because it introduces a second, unpredictable transaction into the timeline. This clause often includes a “kick-out” provision, which allows the seller to continue marketing the property to other buyers.
How Contingent Differs from Active and Pending
The contingent status represents a distinct phase compared to the Active and Pending designations seen on Multiple Listing Service (MLS) records.
An Active listing means the property is fully available, has not yet received an accepted offer, and is being shown regularly to prospective buyers. This is the initial stage where market exposure is at its maximum, and all terms are open for negotiation.
The Pending status indicates that all major contingencies have been successfully satisfied or waived by the buyer and seller. The deal is considered firm and is progressing toward the final closing date, making it unlikely to fail. A contingent property, however, is in the middle, having an accepted offer but with conditions that still allow the deal to fall apart.
While a property is contingent, sellers often continue to show the home and accept backup offers, especially if the deal includes a complex condition like the sale of another home. This practice is less common with a pending status, where the property is usually taken off the market entirely. The contingent designation signals to other buyers that a deal exists but that the window for a backup offer remains open.
The Buyer’s and Seller’s Actions During the Contingency Period
Once the contract is executed, the contingency period initiates time-sensitive actions for the buyer. The buyer must quickly order the home inspection and the appraisal, often within the first 10 days of the contract, to ensure prompt receipt of reports. Concurrently, the buyer works with their lender to submit final loan documentation, moving toward a firm loan commitment. Adhering to the specific deadlines outlined in the purchase agreement is important, as failure to act swiftly can result in the loss of the contract or the earnest money deposit.
The seller’s actions during this time involve facilitating the buyer’s due diligence and preparing legal documentation. This includes ensuring access to the home for inspectors and appraisers and providing any requested disclosures. If the buyer requests repairs following the inspection, the seller must decide whether to negotiate, agree to make the changes, or offer a credit in lieu of physical work. Clear communication between all parties is necessary to prevent delays that could jeopardize the closing date.
Understanding the Risks of a Contingent Deal
Despite the existence of a signed contract, the contingent status carries inherent risks that can lead to the dissolution of the sale. One frequent cause of failure is a low appraisal where the home’s value does not justify the agreed-upon price, creating a funding gap the parties cannot bridge. Inspection results also pose a threat, particularly if the inspector finds major structural or environmental issues that the seller refuses to remedy.
Buyer financing falling through is another common reason a contingent deal collapses, often due to changes in the buyer’s employment status or credit profile after the initial pre-approval. While the property is technically off the active market, the contract remains vulnerable until the buyer formally removes all conditions. This means that a percentage of contingent deals ultimately fail to close, varying based on market conditions and the complexity of the contingencies involved.
Key Contingency Variations
When reviewing listings, buyers may encounter specific variations of the contingent status.
Contingent with Kick-Out Clause
This common variation is frequently paired with a buyer’s sale of existing home contingency. This provision allows the seller to continue marketing the property and accept a new offer from a different buyer. The original buyer is then given a short timeframe, typically 24 to 72 hours, to either remove their sale contingency and proceed unconditionally or forfeit the contract.
Contingent, No Show
This signifies that an accepted offer exists, and the seller has elected to stop allowing property showings. The seller is confident in the existing deal and does not want to disrupt the home while waiting for the contingencies to clear.
Contingent, Continue to Show
This means the seller is actively soliciting backup offers due to concerns about the primary buyer’s ability to satisfy the conditions. These variations clarify the seller’s strategy and the level of risk perceived in the current contract.