What does active contingent mean

It also involves some real estate terms you may have not heard of before. One of those terms is active with contingency.

What does it mean when a home you fall in love with is listed as contingent? The majority of real estate offers contain contingencies, or clauses.

First off, contingent is used to describe a house that is on the market and available to buy. A potential buyer has already looked at the home and wants to purchase it. Active with contingency means that an offer on the house has been made, and the seller has accepted it; however, before the sale can be finalized, some criteria needs to be met.

While contingencies benefit both the buyer and the seller, they benefit the buyer the most. Because they allow the buyer to get out of the contract with no repercussions. The buyer can also get their earnest money back. This can save a home buyer a lot of money, time, and stress. The contingencies are clauses in the sales contract which usually include matters that deal with appraisal, home inspection, and mortgage approval.

These clauses usually include a deadline or timeframe that defines when the conditions must be met. Some contingencies may vary from state to state. A listing changes from contingent to pending when an offer is accepted by the seller and all contingencies are addressed.

Active with contingency listings are still active listings on real estate sites, meaning other buyers can still make an offer. Once all of the contingencies have been removed and the active contingent stage is completed, the property will show a status of pending.

A home will have pending status until all legal work is completed. The short answer is that you can make an offer at any stage of the home buying process.

Owners whose home is in contingent status can accept a backup offer. Every MLS has its own definitions. For example, in Washington, a sale contingency is the only contingency that marks a home contingent. Homes with other contingencies show up as pending. In the meantime, any other buyer can come along and make an offer. The original buyer is still first in line, but a new buyer has the chance to bump them. In the NWMLS, the first party has five days to come up with the funds to close or the home goes to the second buyer.

If you fall in love with a contingent home, talk with your agent about whether or not it makes sense to offer. The answer to this question can also vary by location. Sellers may also accept your offer as a backup to put you into first place if the existing pending offer falls through.

When you see a home listed as contingent, you may see additional qualifiers. In Washington, sellers with contingent homes are typically open to reviewing new offers.

There is language in the contingency stating that a new buyer may bump the contingent buyer with five days for the first buyer to meet their conditions or waive their contingency before being bumped. Pending status is the step when a home is going through the closing process. The chances of a pending home going back to active status are slim. Pending status may also come with some informational qualifiers. A home is officially sold once closing is finished.

The very last step happens when the escrow company files the ownership papers as public record. About the author: Liz Gallagher is the Editorial Director at Flyhomes, publishing articles to give people the education and insights they need to be confident decision makers as homebuyers, sellers, and owners.

Cover photo by Elina Fairytale on Pexels. Get a weekly roundup of our blog stories plus the latest market updates and more. Search for:. Things to know about a home listed as active contingent The seller has accepted a conditional offer. The expected buyer may end up not buying the home. You can make an offer on an active contingent property, but the current buyer is first in line.

What is active contingent? Common contingencies Homebuyers can include one or more contingencies with their offer to purchase a home. Here are four common types of contingency. On the flip side, you may see a property listed as pending instead.

A pending status means that the seller has accepted an offer, and all of its contingencies have been satisfied, addressed, or waived. The home will remain in pending status until all the paperwork is processed and the deal officially closes.

Home buyers often add contingencies to their offer in order to protect themselves if something goes wrong during the sale. More specifically, these contingencies allow the buyer to back out of the contract under specific conditions without losing their earnest money deposit.

There are a few different types of contingencies in real estate:. A financing contingency , also known as a loan contingency, means that if the buyer has trouble getting a mortgage for the home purchase, they can drop out of the contract with no penalty. That way, they can avoid overlapping housing costs. An inspection contingency gives buyers the ability to negotiate repairs or cancel the contract based on the results of a home inspection.

An appraisal contingency states that if the appraised value of the home is lower than the purchase price, the buyer can negotiate the purchase price or walk away at no cost.

Can a home buyer make an offer on an active contingent listing? Contingencies present a sort of dilemma. So is it possible for buyers to avoid contingencies with no downside?