A “contingent offer” is when you make an offer on a home and the seller accepts it, but the actual purchase is contingent on certain criteria being met.
Contingent offers are important because they allow you to back out of a deal if the criteria outlined in your offer are not met, and there are certain types of contingencies that are extremely common to see in an offer.
But what, exactly, are those types?
A recent article from realtor.com outlined common contingencies buyers include when making an offer on a home, including:
- Home inspection contingency. This is one of the most common contingencies, and it gives buyers the opportunity to hire an inspector to thoroughly inspect the property prior to purchasing it. And if something comes up during the inspection that they weren’t aware of and want to be fixed prior to buying the home, they have the ability to either negotiate with the sellers, or back out of the deal completely.
- Appraisal contingency. An appraisal contingency allows buyers to get the home appraised to ensure that the value of the home and the listing price are in alignment. With this contingency, if the appraisal comes in lower than the home price, buyers have the opportunity to walk away from the purchase.
- Mortgage contingency. A mortgage contingency simply states that the purchase of the home is contingent on the buyers successfully getting a mortgage. So, if for whatever reason your financing falls through, the mortgage contingency allows you to back out of the purchase.
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