What Does Contingent Mean in Real Estate?

While looking for a house for sale, you must have come across various property listings with various sale statuses, for instance, for sale, closed, pending, and contingent. All of these sales statuses indicate at what stage the property’s sale process is currently at. For a layman, it is essential to understand the meanings of these statuses and the differences between them in order to identify the properties available for sale. Also, it will help you better understand how to proceed with the offer.

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In this blog Graana.com, Pakistan’s smartest property portal has come up with a blog on what contingent means in real estate.


What Does Contingent Mean in Real Estate?


What does contingent mean in real estate


Generally, the term contingent in real estate means being dependent on certain circumstances. In terms of real estate, the word contingent means a sale dependent on the contingencies of the contract being met.

A contingent listing signifies that the owner of the property has accepted an offer, but is still open to other offers while ensuring that all the constraints are fulfilled. If all the conditions mentioned in the contract are met by both parties, the sale will go through.

However, if an issue arises, either party has the right to back off and not proceed further with the contract. This will completely annul the contract and the listing will again become active in the market for selling.

Common Contingencies in Real Estate

In most cases, a huge chunk of money goes into real estate transactions, which is why both parties want this surety that nothing goes wrong once the deal is sealed.

Both the buyer and the seller have the right to add contingencies in the contract to safeguard them against unforeseen circumstances.

Following are some of the most common contingencies in real estate transactions:

  • Appraisal
  • Title
  • Home Inspection
  • Mortgage
  • Home Sale
  • New Housing



If the one purchasing the house is getting a mortgage for buying, there is a high probability that they will get an appraisal contingency in the proposal they make. Lenders appraise the house before offering the mortgage, just to be sure that the property is worth it.

In case the property is worth less than the anticipated amount, the lender might ask for a raise in the down payment, or in some cases, they may refuse to offer the loan.

Adding the appraisal contingency in the real estate transaction gives the buyer an opportunity to not move forward with the transaction in case the house appraises very low for the lender.



Another contingency that buyers add to the real estate transaction is the title contingency.

Under this contingency, buyers are able to conduct a search on the title to find out whether the seller has a clear title to the property or not.

Home Inspection

As the name suggests, a home inspection contingency permits the purchaser to inspect the property they are going to buy with the help of professionals. This can let them know about any potential damage to the property beforehand.

The contingency may outline the maximum amount that the buyer is willing to pay to renovate the house. For instance, it can permit them to back off from the transaction if the anticipated cost of renovation exceeds Rs100,000.


Even though the buyer gets preapproved for a loan, there will always be a chance that some issue might come up and bring an end to their deal.

Even if a buyer gets preapproved for a loan, there is always a chance that something will come up and cause their deal with the lender to fall through. Mortgage contingencies emancipate the buyer if they get refuted for a loan in spite of their efforts to get approved.


Home Sale

If the buyer owns another property already, they can sell that one and use the money to purchase a new one.

In such cases, buyers add a contingency in the real estate transaction that they will purchase this new house only when they get to sell the previous one under a certain time frame.


New Housing

If the seller is selling the property they are currently living in, they can add a new housing contingency in the contract.

This contingency will let them back out of the deal after accepting it, in case they are unable to find a new residence for them to live within a certain time period.


An Example of Contingent

To elaborate on the concept of the contingent in real estate, here is an example:

A person offers to buy a house for Rs.400k, making a down payment of Rs.80k. They incorporate an appraisal contingency, declaring that the property must evaluate for at least that sum, and a survey contingency, restraining the anticipated renovation price to Rs15k. The offer gets approved, and the agreement is sealed.

If the evaluation comes back for Rs400k or more, and the survey exhibits no considerable problems, the sale can proceed smoothly.

However, if the house evaluates for less than Rs40k, or the survey identifies more than Rs15k in the requisite renovation, the purchaser can back off from the deal or modify their offer.


Types of Contingent Statuses


what does contingent mean in real estate


Following are some of the different types of listings that one might find in the real estate market.

Continue to Show Contingent in Real Estate

This signifies that the deal has been sealed by both parties accepting the contingencies, however, the listing is still active in case the offer does not succeed.

No Show Contingent in Real Estate

This means that the seller has accepted the offer and does not want to make the house available for sale in the market anymore.
This is an indicator of the fact that the offer has very few contingencies or contingencies that are not likely to be problematic.


The seller can choose not to proceed further with the offer if the attendant contingencies are unfulfilled by a specific deadline.

Without Kick-out

If the seller has approved an offer with contingencies but has not fixed a deadline for them to be fulfilled. In that case, the overall procedure might take a bit more time than usual, as the buyer is not in a hurry to meet all the contingencies.


Short Sale Contingent

A short sale contingent listing depicts that the seller has approved an offer and is ready to sell their property for an amount less than they owe to their lender.

As the lender is also involved, short sales typically take a longer time to be completed than other types of deals.

In such a case, the seller has a right to acquire backup proposals in case the present proposal comes to nothing.


Contingent Probate

Probate is a legal procedure through which the court manages the assets of a deceased person.

Just like short sale contingent listings, and probate sale, house sellers accept an offer, but in case of difficulty of the transaction, they can back out and opt for other offers.


Difference Between Contingent and Pending

Pending and contingent are almost similar things, but with a few characteristic differences. In simple words, an offer that includes contingencies initiates as contingent.

Once those contingencies are met, the offer status shifts to pending. This means that the offer is one step further to closure. Hence, a pending offer means that the deal is almost done as compared to the contingent one.

How Long Does it Take to Go From Contingent to Pending?

This time period varies extensively from one deal to another. A transaction with fewer contingencies will typically proceed faster than one with several ones. Also, a transaction with no kick-out provision may take, especially long, as there is no time limit fixed for the buyer to meet all requisite criteria.

In this blog, we covered everything regarding contingencies in real estate.

For more information, visit Graana blog.

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