Terms to Know When You’re Dealing with Real Estate

Every professional sector has its distinct terminology, which the average layman doesn’t understand.  Over the next year, my monthly blog will present real estate words in layman’s terms that even the most ‘average bear’ can understand and use to their real estate adventures.

This month’s term is Contingent.

You’ve been looking for homes in this HOT real estate market. After working with your Realtor® to find the right home, you finally find it. Your Dream Home! It checks off every box on the list. You make an appointment, and when you arrive, you find that the house is contingent. WHAT? Your time and work are void. Disappointment settles in. The house is under contract. 

In the current real estate market, this is not an uncommon occurrence. So what does contingent mean?  

Contingency is an agreement to do or not to do one thing that is dependent upon something else that may or may not occur. Homes that are under contract are called Contingent. Contingency depends on the criteria that have to be met for the property to close. 

The textbook definition is “A contingency is certain conditions in the purchase agreement that needs to be met before the sale can be final.” - AWARE in SC, Charles D. Wyatt, Jr. 10th Edition, p.111.

Almost all contingencies in the agreement will be from the buyer, but they can come from the seller too. The criteria can include obtaining financing or having a positive home inspection, or even having to sell their present home. 

A Seller may have a contingency to lease the property back for a declared time period. This is often to allow time to pass for their future home to be ready for them to move in.

To sum it up, a contingency is agreed to by both parties that a condition must be met for the contract to be met.

Call me today with any questions about our real estate market.