Monday, March 23, 2020

Whats does contingent mean?

What is a contingent offer in real estate? A contingent offer means that an offer on a new home has been made and the seller has accepted it, but that the final sale is contingent upon certain criteria that have to be met. These criteria, or contingencies, are clauses in a sales contract that typically fall under three major categories: appraisal, home inspection, and mortgage approval.
Such contingencies are mainly put in place so that buyers can back out of a real estate sale if something goes wrong, usually without losing their earnest money deposit. A seller might entertain other offers after a refusal, but won’t deal with another buyer until the contingent offer is settled in one way or another.

Home inspection contingent offer

A home inspection contingency could well be the most important one for home buyers. This contingency gives buyers the right to have their new home professionally inspected after putting down earnest money. And finalizing the real estate transaction usually hinges on this contingency. If something is wrong, a contingent offer allows the buyer to request that it be fixed and to renegotiate the price—or back out of the sale. It’s rarely advisable to waive an inspection contingency, and home buyers should generally consider this a must-have clause in a sales contract.

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