{"id":4295,"date":"2024-11-14T13:19:16","date_gmt":"2024-11-14T18:19:16","guid":{"rendered":"https:\/\/tomo.com\/blog\/?p=4295"},"modified":"2025-02-10T11:47:32","modified_gmt":"2025-02-10T16:47:32","slug":"what-do-contingent-and-contingencies-mean-when-it-comes-to-buying-a-house","status":"publish","type":"post","link":"https:\/\/tomo.com\/blog\/what-do-contingent-and-contingencies-mean-when-it-comes-to-buying-a-house\/","title":{"rendered":"What do contingent and contingencies mean when it comes to buying a house?"},"content":{"rendered":"\n<p>\u201cContingent\u201d and \u201ccontingency\u201d have related but distinct meanings in real estate:<\/p>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Contingent<\/strong>: This term typically describes the status or condition of a real estate deal. For example, when a property listing is marked as contingent, it means that an <a href=\"https:\/\/tomo.com\/blog\/how-to-win-an-offer-on-a-home\/\" title=\"offer has been accepted \">offer has been accepted <\/a>but the sale is not finalized because certain conditions must still be met.<\/li>\n\n\n\n<li><strong>Contingency<\/strong>: This refers to the specific conditions or requirements that must be satisfied for the contract to proceed. For instance, a financing contingency means the buyer must secure a <a href=\"https:\/\/tomo.com\/mortgage?utm_source=tomo_blog\" title=\"mortgage,\">mortgage,<\/a> and an <a href=\"https:\/\/tomo.com\/blog\/do-i-need-to-worry-about-a-home-inspection\/\" title=\"inspection\">inspection<\/a> contingency means the buyer can request repairs based on the inspection results.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p>In short, \u201ccontingent\u201d describes the state of a contract, while \u201ccontingency\u201d refers to the actual conditions that affect that state<\/p>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/tomo.com\/mortgage\/rates?utm_source=tomo_blog\">See today&#8217;s rates<\/a><\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What happens if I am looking for a home and see a listing that is contingent? Can I still place an offer?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Yes&#8211;you can still toss your hat in the ring for a home listed as contingent! Here&#8217;s some terms to understand. (If you choose to conduct your home search with an <a href=\"https:\/\/tomo.com\/blog\/do-i-need-a-realtor-to-buy-a-house-pros-and-cons-of-diy-home-buying\/\" title=\"agent\">agent<\/a>, they are a great resource to break this down as well).<\/p>\n\n\n\n<p><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Contingent status<\/strong>: So, the seller has an accepted offer, but they\u2019re still tying up loose ends with contingencies\u2014think inspections, financing, or whatever else is on the checklist. The deal isn\u2019t sealed yet.<\/li>\n\n\n\n<li><strong>Backup offer<\/strong>: Your offer will be considered a backup. If the current buyer stumbles\u2014maybe their financing falls through or the inspection reveals a hidden gremlin\u2014the seller might just turn to you.<\/li>\n\n\n\n<li><strong>Seller&#8217;s mindset<\/strong>: Keep in mind, the seller\u2019s likely focused on their current buyer, so they might not be in a rush to entertain other offers. But hey, if your offer is solid or the seller senses some trouble in paradise with the current deal, they might reconsider.<\/li>\n\n\n\n<li><strong>Stay in the loop<\/strong>: If you\u2019re really keen on that property, keep an eye on its status. Touch base with your agent to see how things are progressing. If the existing buyer starts hitting roadblocks, you want to be ready.<\/li>\n\n\n\n<li><strong>Be ready to roll<\/strong>: If the seller does bite and accepts your offer, be prepared to move fast. You might need to tweak your terms or closing timeline to make your offer more appealing.<\/li>\n<\/ol>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What types of contingencies could be involved in a home offer?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Contingency type<\/strong><\/td><td><strong>Description<\/strong><\/td><\/tr><tr><td><strong>Financing contingency<\/strong><\/td><td>Your offer depends on securing a mortgage. If financing falls through, you can back out without losing <a href=\"https:\/\/tomo.com\/blog\/what-is-the-difference-between-earnest-money-and-my-down-payment\/\" title=\"earnest money.\">earnest money.<\/a><\/td><\/tr><tr><td><strong>Inspection contingency<\/strong><\/td><td>Allows for a professional inspection. If major issues are found (e.g., leaks, mold), you can request repairs or withdraw your offer.<\/td><\/tr><tr><td><strong>Appraisal contingency<\/strong><\/td><td>Protects against overpaying. If the <a href=\"https:\/\/tomo.com\/blog\/what-is-a-home-appraisal-and-how-much-does-it-really-cost\/\" title=\"appraisal\">appraisal<\/a> comes in lower than your offer, you can renegotiate or back out.<\/td><\/tr><tr><td><strong>Sale of current home<\/strong><\/td><td>Your offer hinges on selling your current home first, avoiding juggling two mortgages.<\/td><\/tr><tr><td><strong>Title contingency<\/strong><\/td><td>Ensures the title is clean. You can back out if there are liens or ownership disputes.<\/td><\/tr><tr><td><strong>HOA review<\/strong><\/td><td>Allows for a review of <a href=\"https:\/\/tomo.com\/blog\/is-it-good-to-buy-in-a-hoa\/\" title=\"Homeowners Association\">Homeowners Association<\/a> rules and fees before proceeding, avoiding surprise costs or restrictions.<\/td><\/tr><tr><td><strong>Home warranty contingency<\/strong><\/td><td>Requests a warranty that covers repairs for a certain period after closing, providing peace of mind.<\/td><\/tr><tr><td><strong>Contingency for repairs<\/strong><\/td><td>Asks the seller to complete specific repairs before closing, ensuring the home is in good condition when you take ownership.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Does contingent in mortgage have the same or different meaning than in real estate?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>In the context of mortgages, &#8220;contingent&#8221; carries a similar meaning as it does in real estate offers. When it comes to mortgages, &#8220;contingent&#8221; refers to conditions that must be met for the loan to proceed. Here are some specific examples:<\/p>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Loan approval contingencies<\/strong>: Before a mortgage lender fully approves your loan, they may set contingencies based on:\n<ul class=\"wp-block-list\">\n<li><strong>Income verification<\/strong>: The lender will require proof of your income (like pay stubs or tax returns). If your income doesn\u2019t meet their criteria, the loan could be denied.<\/li>\n\n\n\n<li><strong>Employment status<\/strong>: If you change jobs or lose your job during the mortgage process, it could jeopardize your loan approval.<\/li>\n\n\n\n<li><strong>Credit approval<\/strong>: The lender will check your <a href=\"https:\/\/tomo.com\/blog\/what-credit-score-do-i-need-to-buy-a-home\/\" title=\"credit score \">credit score <\/a>and history. If there are negative changes, like new debts or missed payments, it could affect your ability to secure the loan.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Property condition<\/strong>: Lenders may require certain conditions about the property itself, such as:\n<ul class=\"wp-block-list\">\n<li><strong>Appraisal value<\/strong>: The home must appraise for at least the amount of the loan. If it appraises for less, the lender may refuse to fund the loan.<\/li>\n\n\n\n<li><strong>Property insurance<\/strong>: Proof of <a href=\"https:\/\/tomo.com\/blog\/what-is-pmi\/\" title=\"insurance\">insurance<\/a> may be required, and the coverage must meet the lender\u2019s standards.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Title and legal issues<\/strong>: The lender may require a clear <a href=\"https:\/\/tomo.com\/blog\/whats-a-mortgage-title-and-whats-it-to-you\/\" title=\"title\">title<\/a> before finalizing the mortgage. If there are <a href=\"https:\/\/tomo.com\/blog\/real-estate-liens-explained-what-they-are-and-how-they-affect-you\/\" title=\"liens\">liens<\/a> or ownership disputes, this could prevent the mortgage from going through.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/tomo.com\/mortgage\/affordability?utm_source=tomo_blog\">How much home can I afford?<\/a><\/div>\n<\/div>\n\n\n<div style=\"padding-top:var(--wp--preset--spacing--30);padding-bottom:var(--wp--preset--spacing--30);padding-left:var(--wp--preset--spacing--30);padding-right:var(--wp--preset--spacing--30);margin-top:var(--wp--preset--spacing--30);margin-bottom:var(--wp--preset--spacing--30);margin-left:0;margin-right:0;\" class=\"has-link-color wp-elements-c54b177fd5d2f341f8967a20726f2ac0 wp-block-post-author has-text-color has-contrast-color has-background has-tertiary-background-color has-large-font-size\"><div class=\"wp-block-post-author__content\"><p class=\"wp-block-post-author__name\"><a href=\"https:\/\/tomo.com\/blog\/author\/clairegtomonetworks-com\/\" target=\"_self\">Claire Gallaudet<\/a><\/p><p class=\"wp-block-post-author__bio\">Claire is a Mortgage Analyst at Tomo, where she explores the data and trends shaping the housing market. She is especially interested in how economic forces impact homebuyers. A Seattle native, she now lives in Austin, where she balances analysis and communications with teaching yoga and walks around the lake with her dog.<\/p><\/div><\/div>\n\n\n<p>If you&#8217;re ready to start your journey to homeownership, <a href=\"https:\/\/tomo.com\/mortgage\/app\/preapproval?utm_source=tomo_blog\" title=\"\">get pre approved with Tomo Mortgage today.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u201cContingent\u201d and \u201ccontingency\u201d have related but distinct meanings in real estate: In short, \u201ccontingent\u201d describes the state of a contract, while \u201ccontingency\u201d refers to the actual conditions that affect that state What happens if I am looking for a home and see a listing that is contingent? Can I still place an offer? Yes&#8211;you can [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":4299,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[38],"tags":[],"class_list":["post-4295","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mortgage-dictionary"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/tomo.com\/blog\/wp-content\/uploads\/2024\/11\/contingency-jpg.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4295","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/comments?post=4295"}],"version-history":[{"count":2,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4295\/revisions"}],"predecessor-version":[{"id":4300,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4295\/revisions\/4300"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media\/4299"}],"wp:attachment":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media?parent=4295"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/categories?post=4295"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/tags?post=4295"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}