Buying a Home: What Does Contingent Mean?

Posted by Eagle Inspections on December 14th, 2021

Buying a Home: What Does Contingent Mean?

Buying a home is at once exciting and stressful. Learning all the terms can add to the stress if you\'re new to the process. One of the terms you will see frequently is contingent. Let\'s take a closer look at what that means.

Contingent Homes

Homes are listed as contingent when the following conditions are present:

• An offer has been made and accepted.
• Criteria are in place that must be met before the sale is final.
• If these criteria are not met, the buyer has the option to back out of the agreement and receive a refund of their earnest money.

Contingent homes are still active listings. Sellers can continue to show the home and entertain offers.

Contingency Criteria

Common criteria for contingencies include the following:

• Appraisals
• Inspections
• Mortgage approval
• Sale of a previous home

How is Pending Different?

Pending homes have passed the contingency phase and are considered nearly complete. Typically finalizing documentation is the only thing holding up the sale. Pending listings are no longer active, and the buyer\'s contract will usually preclude the seller from accepting any other offers.

How Long Can a House Be Contingent?

The time needs to be long enough to allow the parties to satisfy the criteria. Thirty to sixty days is considered reasonable. If the buyer cannot secure their financing or sell their prior home within this window, sellers should freely cancel the contract and seek out another buyer. Sometimes contingency periods are extended. This might happen if financing is delayed or a strong buyers market. In addition, buyers can request an extension if they encounter difficulties. For example, if home inspectors in Philadelphia find an issue with the home, the buyer can request extra time to obtain more information.

Can You Make an Offer on a Contingent Home?

Yes, you can make an offer on a contingent home. If the original deal falls through, you\'ll be the first on the list to get a contract.

What is a Home Inspection Contingency?

Many contracts include a contingency for a home inspection. This lets the buyer negotiate for repairs or walk away from the deal if the inspection uncovers costly maintenance or safety issues. Inspection clauses give buyers time to schedule the inspection, receive the final report, and respond appropriately. While it might be tempting to waive the inspection contingency to speed up closing, this is never a good idea. Purchasing with confidence requires buyers to have the home assessed by an objective third party.

Now that you understand more about contingency, you\'re more prepared to navigate the home buying process. Good luck!