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What Does Contingent Mean on a Real Estate Listing?

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When you become a real estate agent, you learn a new language: the language of the real estate industry. The contingent listing status is one term many people don’t quite understand. You should be able to clearly explain terms like “contingent” to your clients to help them make informed decisions when buying or selling a home. 

In this guide, we explain the answer to “what does contingent mean on a real estate listing?” and highlight the different types of contingencies and contingency statuses. Our team at Become a Local Leader® writes helpful guides on running a successful real estate business. Check out our guide to listing appointments for more insider tips.

What Does Contingent Mean in Real Estate?

To be “contingent” is to be dependent on specific circumstances. In real estate, the contingent status on a listing means that the seller has accepted an offer, but it isn’t final until the contingencies in the contract are met. Since the sale hasn’t technically happened yet, the seller or buyer can back out of the contract if the other party doesn’t uphold their end of the deal. 

Buyers and sellers use contingencies to protect themselves from being stuck in a contract that ends up unfavorable to them. For example, a buyer could get hit with a $20,000 repair bill if they don’t require a good home inspection result as a contingency on their offer. 

Common Contingencies in Real Estate

Buyers often have contingencies in their offers because they want security in case issues pop up during one of the biggest purchases they’ll make in their lifetime. There’s some risk to having contingencies, especially on a hot listing, because the seller might drop the buyer’s offer in favor of one of their backup offers with no additional requirements. 

As a real estate agent, you should inform buyers of contingencies that work for their situation, providing the right amount of protection without taking their offer out of the running. 

The following are the most common contingencies in real estate:

Home Inspection

A home inspection contingency allows the buyer to conduct a professional inspection of the property, assessing its condition and potential repair costs. The buyer might put a limit in the contract for how much they’re willing to pay for repairs and can back out if the inspector quotes above that limit. 

Mortgage

It’s best to get preapproval for a mortgage before making an offer, but there’s always a slight chance the lender won’t give final approval. Typically, a mortgage contingency provides the buyer with 30 to 60 days to secure financing. If their genuine efforts to get approved for a mortgage fail after that period, the buyers can choose to back out.

Title

Buyers can make their offer contingent on a title search that reveals no issues. A house’s title shows who owns the house and if it has issues (called “encumbrances”) that could cause problems for the buyer. If the search digs up issues with the title, the buyer can take back their offer without penalty. 

Home Sale

If a buyer wants to sell their house before purchasing a new one, they could propose a home sale contingency. The seller can accept and wait for the buyer to sell their house before closing the sale or choose to go with another offer. Sellers typically turn down home sale contingencies because they want to sell their home quickly. 

Appraisal

An appraisal contingency is typical when a buyer takes out a mortgage to buy a home. The lender can’t give the buyer more money than the listing is worth, so they might deny the loan if the appraisal is significantly below the agreed-upon sale price. The buyer can abandon the offer or work out a way to make up the difference between the loan and the sale price. 

Types of Contingent Statuses

You should give specific advice based on the status of the listings the buyer is interested in. If a listing has a contingent status, it can affect whether it’s worth it for the buyer to make an offer. 

Below are examples of contingent statuses on active listings:

Contingent: Continue to Show (CCS)

The seller has accepted an offer but has contingencies to address with the buyer. Other buyers can still view the listing and make offers until the sale is final. With this status, sellers are usually looking for better offers with fewer contingencies. 

Contingent: No Show

The seller accepted the buyer’s offer and is no longer showing their property or accepting offers. This status typically indicates that the seller is confident the contingencies involved in the offer won’t cause issues that make the contract fall through.  

Contingent: With Kick-Out

The kick-out clause provides a deadline for the buyer to complete their contingencies, and the seller can continue to show their listing and cancel their acceptance of the buyer’s offer if they don’t meet the deadline.

Contingent: Without Kick-Out

Without a kick-out clause, the buyer has no deadline for fulfilling contingencies, and the seller can’t accept other offers or withdraw their acceptance.

Contingent vs. Pending: What’s the Difference?

In real estate, you might hear the terms contingent and pending used interchangeably, but they have important differences in meaning. A contingent listing means the seller accepted an offer, but specific requirements haven’t been met. Although it’s rare, one of the parties might cancel the contract, and the seller can start taking other offers.  

If the listing status is pending, the buyer and seller have settled all contingencies, the listing is no longer active, and the closing process is nearing completion. 

Check Out Real Estate Guides From Our Helpful Community

You can find answers to more questions like “what does contingent mean on a real estate listing?” from our team here at Become a Local Leader®. We post guides for topics like choosing the right brokerage or marketing on social media to provide real estate agents with information that helps them elevate their businesses and stand out as the best real estate agent in their community. Check out our listing appointment checklist for real estate agentsSubscribe to get the weekly newsletter for local leaders.

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