Whether you're buying or selling a home, navigating the real estate market can feel complex—especially when terms like "contingent" come into play. But what does “contingent” mean for buyers and sellers? Understanding this term is essential for successfully navigating the home-buying or selling process. Let’s break it down.
What Does “Contingent” Mean in Real Estate?
In real estate, a “contingent” offer means the seller has accepted a buyer’s offer, but certain conditions—or contingencies—
Common Types of Contingencies in Real Estate
Here are some of the most common contingencies you may encounter during a home sale or purchase:
1. Home Inspection Contingency
This allows the buyer to hire a professional inspector to evaluate the property. If significant issues are discovered, the buyer can:
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Negotiate repairs with the seller.
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Request a price reduction.
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Walk away from the deal without penalty.
2. Financing Contingency
This protects the buyer if they’re unable to secure a mortgage. If the loan is denied, the buyer can back out of the agreement without losing their earnest money deposit.
3. Appraisal Contingency
If the property’s appraised value is lower than the agreed-upon sale price, the buyer has the option to:
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Renegotiate the purchase price.
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Cancel the contract and retain their earnest money.
4. Sale of Buyer’s Current Home Contingency
Some buyers make offers contingent on the sale of their current home. If their home doesn’t sell within the specified timeframe, they can withdraw from the purchase.
5. Subject to Finding Suitable Housing Contingency
While most contingencies are designed to protect buyers, this one benefits the seller. If the seller cannot find a new home to move into, they can cancel the agreement without penalty.
What Buyers Should Know About Contingencies
For buyers, contingencies act as a safety net, allowing you to exit a deal without financial penalties if unexpected issues arise. However, in a competitive market, sellers often favor non-contingent offers because they’re less risky. If you’re considering including contingencies, consult with an experienced real estate agent to determine the best approach.
How Sellers Can Navigate Contingencies
For sellers, contingencies can introduce some uncertainty. Offers with fewer contingencies are generally more appealing, as they reduce the risk of the deal falling through. However, working with a knowledgeable agent can help you evaluate offers and minimize risks, ensuring a smoother transaction.
Navigating Contingent Sales with Confidence
Whether you’re buying or selling a home, contingencies don’t have to feel overwhelming. With the right guidance, you can navigate the process with confidence. That’s where working with experienced professionals like John and Michelle Ternullo makes all the difference. Their in-depth knowledge of the local market and expertise in managing contingencies ensure your real estate transaction is as seamless and stress-free as possible.
Need Help? Let’s Talk!
Whether you’re navigating a contingent offer as a buyer or evaluating one as a seller, the Ternullo Real Estate Team is here to help. Contact us today to learn how we can guide you through every step of your real estate journey in the suburbs north of Boston.
John and Michelle Ternullo lead The Ternullo Team at Leading Edge Real Estate. Lifelong residents of the North of Boston area, they focus exclusively on residential purchases and sales. Their team approach ensures clients benefit from their combined strengths, offering expert guidance in marketing, negotiations, pricing strategies, and more. Dedicated to achieving top results, they make the home buying and selling process seamless and successful for their clients.
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