Contingent Offer: What It Means and Common Contingencies
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A contingent offer is an offer to buy a home that only becomes final if certain conditions are met. If a condition fails, the contract usually lets the buyer cancel, often keeping their earnest money, as long as they follow the deadlines in the contract. Source: CFPB: Buying a House.
Common contingencies
| Contingency | What it protects | What to watch |
|---|---|---|
| Inspection | Lets you inspect and then negotiate repairs or cancel | Short deadline, often days, set in the contract |
| Financing (mortgage) | Lets you cancel if your loan is not approved | Must apply quickly and in good faith |
| Appraisal | Covers you if the home appraises below the price | You may be asked to cover the gap instead |
| Home sale | Lets you cancel if your current home does not sell | Sellers often see this as weaker |
| Title | Lets you cancel if title problems cannot be fixed | Read the title commitment carefully |
'Contingent' vs. 'pending' on a listing
Listing services use these labels differently by area, but in general contingent means the seller accepted an offer that still has open conditions, and pending means the conditions have been met or removed and the sale is waiting to close. Some sellers keep taking backup offers while a sale is contingent.
Waiving contingencies
In competitive markets buyers sometimes waive contingencies to make an offer stronger. That can cost you your earnest money or leave you buying a home with problems you did not know about. Contract terms vary by state, so ask your agent or a real estate attorney before you waive anything.
Related: how long closing takes and do I need a realtor to buy a house?
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