What Does “Contingency” Mean on a Real Estate Listing?
If you’re like most people, you’ve heard the term contingency as it relates to a real estate purchase contract.
But what is a contingency, and what does it have to do with the sale of your home?
What is a Real Estate Contingency?
A contingency is a condition. It says, “If this thing happens, we can move forward with the deal.” It could be something the buyer has to do for the process to move forward, like being approved for a loan or selling their current home.
Some of the most common contingencies involve:
Sale of an existing home
Home Inspection Contingencies
Smart buyers have home inspection contingencies built into their contracts. That way, if the inspection turns up a deal-breaker – something the buyer isn’t willing to negotiate on or fix – he or she can back out of the deal without losing the earnest money deposit they put down at the beginning of the transaction.
Loan Approval Contingencies
No buyer wants to be on the hook to purchase a property that he or she doesn’t have the money for, so it’s really common to have financial contingencies like this one in the contract. If the buyer can’t get approved for a loan, he or she can back out of the deal with earnest money intact.
Home Sale Contingencies
Many buyers have to sell their existing homes before they can take on the responsibility of owning another one. If they don’t, this contingency allows them to back out of the deal without forfeiting their earnest money deposit to you.
What Does “Contingency” Mean on a Listing?
When you see “Contingency” on a real estate listing, that means the seller has already accepted an offer. When you receive and accept an offer, your listing will say the same thing. Most buyers won’t make an offer on a home listed that way – but some will, which could be good news for you if your original buyers fall through.
Are You Selling a Home in Lakewood or Long Beach?
If you’re selling a home in Lakewood or Long Beach, we can help. Call us at 562-882-1581 to find out how we’ll market your house to all the right buyers so you can sell it quickly and at the right price.