What is a contingency in real estate?

Answer 1

Basically, a contingency is a condition of the sale of the home agreed upon by both the seller and the buyer, at the time of purchase contract.

The following is an example of a contingency

A Mortgage Contingency: The seller and buyer agree that the buyer will apply, and be approved for a mortgage, within 30 days from when the home goes into contract.
So,
On the 27th day, the buyers have applied and been accepted for a mortgage.
Contingency has been met, and is no longer a barrier.
Or
On the 27th day the buyers have been rejected for a mortgage.
Contingency has not been met, and either buyer or seller may back out of the deal.

Other common contingencies, are home inspections, pest inspections, and radon inspections.

The details and terms of the contingencies are explicitly written in the contract.

Answer 2

It means there is a contract to purchase a home but it is contingent on some things being done and if the things stipulated by the buyer and agreed by the seller, are not done then the contract is null and void

Answer 3

A contingency is when the closing of one property is based on another property closing as well. If you are selling your home and do not have a buyer yet you might purchase a new home "contingent" on your home selling. If it doesn't selll you are not obligated to purchase...you still can if you still qualify...you are just not obligated at that point.

Here is some additional info. Hope this helps.

Answer 4

Sale won't happen unless requests are met. No loss to either parties depending on the contingency

Answer 5

Margaret- Any condition such as financing, sale of another property, inspections such as pest etc. Hope this helps.

Best to You