Contingent Status: What The Term Means for Real Estate
When you’re buying a house, you may be surprised to find the wide range of sale status terms on the internet. This may be particularly confusing to people who are looking to buy their first home.
Most, if not all, first-time Edmonton home buyers are already familiar with a number of these words already, like “sold” and “for sale.” However, other terms used in the real estate context may not be as familiar to you, like “contingent” or “pending.”
What does it mean when a property is marked as “contingent?”
Every so often, Calgary home buyers may come across a property or two that they really want, only to find them marked as either “pending” or “contingent.” The term “pending” is rather self-explanatory and, in a way, “contingent” is as well.
When a property is under contingent status, it means an offer has been accepted, but the buyer has contingencies. In a nutshell, contingencies are conditions that need to be met by either the seller or the buyer before the sale actually goes through. What those conditions are can vary greatly; the key factor is that it’s meant for the protection of both parties!
A buyer can make an offer on a property, for example, but it’s only reliant on being able to sell their current property first. Only when their current property gets sold will the contingent property become a full-on sale. That’s a prime example of a real estate property marked as contingent but not necessarily being sold at the end!
What are typical contingencies that are used in real estate contracts?
Whether a home is being sold or bought, there are many common real estate contingencies that you must be familiar with. Read on to learn about some of them.
Home Inspection Contingency
There is a set period of time (usually a week up to 10 days) wherein the buyer can check out the house for any safety, mechanical, or structural issues. When there are critical issues found, as long as they give proper notice, the buyer can still have the sale terminated. It’s a very significant part of whether any sale or not actually pushes through.
No matter the country, real estate agents everywhere pull all the stops in preparation for this. The biggest reason a lot of house sales fall through is home inspections going sour!
Mortgage Contingency Clause
Buying a home with cash is a luxury most buyers simply don’t have. Many end up having to get financing from a lender just to get negotiations started. When the mortgage contingency is in effect, buyers get a specific time frame to secure a particular loan. If they can’t get financing, they can pull out of the sale without losing their deposit.
Contingency in terms of real estate simply means that a home sale will only be final if certain conditions are met. Common contingencies that are found in real estate contracts include the home inspection contingency and the mortgage contingency clause. When the needs are met, the sale will push through; if not, with proper notice, the buyer can pull out with no losses.
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