Most people are familiar with the terms “active” and “sold” when it comes to real estate listings. An “active” listing means that the property is currently on the market and available for purchase, while a “sold” listing means that the property is no longer available (because it has been sold). But what does it mean when a listing is labeled as “active contingent”?
An active contingent typically means that the seller has accepted an offer from a buyer, but there are still some contingencies that need to be met before the sale can be finalized. For example, the buyer may need to obtain financing or get approval from their homeowner’s association (HOA) before they can purchase the property. Once all of the contingencies have been met, the listing will likely be changed to “pending.”
Table of Contents
•Contingent vs Pending Sale
➥Home Inspection Contingency
➥Appraisal Contingency
➥Financing Contingency
•A Contingent Offer On My House
•Means When A House Is Active Contingent
•How Long Does A House Stay In Contingent
•Can A Seller Back Out Of A Contingent Offer
•Buyer Can’t Meet The Contingencies
•Can A Seller Accept Another Offer
•How Often Do Cash Offers Fall Through
➥Sell Your House To Colorado Cash Buyers
Contingent vs Pending Sale
A contingent offer means that the buyer is willing to purchase the property, but only if certain conditions are met. For example, the buyer may be contingent on being approved for a mortgage. Contingent offers are less binding than pending sales, as the conditions must be met before the sale is finalized. The most common contingencies are financing, appraisal, and inspection. However, there are many other possible contingencies that could be included in a real estate contract.
A pending sale means that all conditions of the sale have been met and both parties are committed to going through with the transaction. In most cases, financing has been approved and inspections have been completed. Once a sale is pending, it’s very unlikely that it will fall through.
Home Inspection Contingency
The home inspection contingency is one of the most important contingencies for buyers. This contingency allows the buyer to have the property inspected by a professional inspector to look for any major defects or problems.
If the inspection reveals any significant issues, the buyer can then negotiate with the seller to have the repairs made or to receive a credit at closing. In some cases, the buyer may even be able to back out of the deal entirely if they are not satisfied with the results of the inspection.
Appraisal Contingency
The appraisal contingency is another important contingency for buyers. This contingency allows the buyer to have the property appraised by a professional appraiser to determine its fair market value.
If the appraisal comes in below the purchase price, the buyer can then negotiate with the seller to lower the price or receive a credit at closing. In some cases, the buyer may even be able to back out of the deal entirely if they are not satisfied with the results of the appraisal.
Financing Contingency
The financing contingency is another important contingency for buyers. This contingency allows the buyer to obtain financing from a lender in order to purchase the property.
If the buyer is unable to obtain financing, they can then negotiate with the seller to extend the contingency period or waive the contingency altogether. In some cases, the buyer may even be able to back out of the deal entirely if they are unable to obtain financing.
Should I Accept A Contingent Offer On My House?
If you are in a hurry to sell your home and you have another offer that is not contingent, it may be worth passing on the contingent offer. However, if you are not in a rush to sell and you are comfortable with the contingencies, accepting a contingent offer may be the best option. Ultimately, it’s up to you to decide whether or not to accept a contingent offer on your home. If the contingencies are reasonable and you are not in a hurry to sell, accepting a contingent offer may be the best option. However, if you are anxious to sell or the contingencies are unreasonable, it may be best to wait
What Does It Mean When A House Is Active Contingent?
Being in an active contingent status means that a property is under agreement with a buyer, but where the sale is contingent on certain conditions being met. These conditions could include the buyer securing financing, the buyer selling their current home, or other factors. Because active contingent listings are still technically active, they will continue to be marketed and shown to potential buyers. However, if another buyer comes along who is not subject to the same contingencies, they may be able to steal the deal. As a result, active contingent listings can be somewhat of a gamble for both buyers and sellers.
How Long Does A House Stay In Contingent Status?
The length of time a house stays in contingent status varies depending on the situation. If the buyer is already under contract to sell their current home, the sale may be able to move quickly once that contract is finalized. However, if the buyer needs to obtain financing, the process could take several weeks or even longer. In some cases, the contingencies may never be met and the deal will eventually fall through.
Can A Seller Back Out Of A Contingent Offer?
Yes, a seller can always back out of a contingent offer, but they may need to pay a fee if they do so. For example, if the buyer has already paid for an inspection or appraisal, the seller may be required to reimburse them for those expenses. Additionally, the buyer may be able to sue the seller if they back out of the deal without a valid reason.
What Happens If The Buyer Can’t Meet The Contingencies?
If the buyer is unable to meet the contingencies, the deal will usually fall through and the seller will be able to keep any earnest money that was deposited. In some cases, the buyer may be able to negotiate with the seller to extend the contingency period or waive the contingency altogether. Then if they agree, the deal can move forward.
Can A Seller Accept Another Offer While Contingent?
Yes, a seller can accept another offer while contingent, but they may be required to notify the first buyer. Additionally, the seller may be contractually obligated to give the first buyer a chance to match any new offers that come in. For example, if the first buyer has already paid for an inspection or appraisal, the seller may be required to give them a chance to match any new offers before accepting another offer.
How Often Do Cash Offers Fall Through?
While cash offers may seem like they are a sure thing, they actually fall through at a higher rate than financed offers. This is because there are often other contingencies that must be met in addition to the buyer having the cash available.
For example, the buyer may need to sell current home first or obtain approval from their lender. As a result, it’s important to be aware that even cash offers may not always go as planned.
Why Should You Sell Your House To Colorado Cash Buyers?
If you are looking to sell your house fast, then Colorado Cash Buyers may be the best option for you. We will buy your house as-is, with no repairs and renovations to be made. We can close the deal within 7-28 days. Additionally, we can help you avoid many of the hassles and headaches that come with selling a house through traditional means. Contact us today to learn more about how we can help you!