Buying a home is thrilling, nerve-wracking, and, at times, completely overwhelming. Between open houses, paperwork, and late-night Zillow scrolling, it’s easy to stumble on a word that stops you in your tracks. One of the biggest head-scratchers? Contingent.
If you’ve ever seen a listing marked as “contingent” and wondered what it actually means, you’re not alone. Let’s demystify it.
The Basics: What Does “Contingent” Mean?
In real estate, “contingent” signals that a seller has accepted an offer from a buyer, but the deal isn’t locked in yet. It’s still hanging on a set of conditions—called contingencies—that must be met before closing.
Think of contingencies as checkpoints. If the buyer clears them all, the sale moves forward. If not, the deal can collapse—usually with the buyer getting their earnest money back.
In other words, “contingent” means almost sold, but not guaranteed.
The Most Common Contingencies
Not every contingency looks the same, but some come up more often than others. Here are the big ones to know:
- Inspection Contingency
The buyer can hire a professional to check out the home. If the inspector uncovers major issues—like a cracked foundation or faulty wiring—the buyer can renegotiate or walk away. - Financing Contingency
Gives the buyer time to secure a mortgage. If their loan falls through, so does the purchase. - Appraisal Contingency
Protects buyers from overpaying. If the property appraises for less than the agreed price, the buyer can ask for a price adjustment or cancel the contract. - Sale of Current Home
Some buyers need to sell their existing house before they can close on the new one. - Title Contingency
Ensures the home has a clean title—meaning no liens, disputes, or legal claims. - Third-Party Approval
Required in certain situations, like co-ops, trusts, or estate sales.
While these are the usual suspects, contingencies can be customized depending on the deal.
How Common Are They?
Very common.
According to the National Association of REALTORS®, a whopping 76% of homes sold in January 2018 had at least one contingency in the contract. Here’s how that broke down:
- 58% included an inspection contingency
- 42% had financing contingencies
- 41% included appraisal protections
In some states, it’s even higher. A report from the New York State Association of REALTORS® found that 91% of August 2017 home sales involved at least one contingency.
So if you’re buying or selling, chances are high you’ll encounter them.
Are Buyers Waiving Contingencies?
In competitive markets, some buyers decide to ditch certain protections to make their offers more appealing. But that trend has shifted.
Data from the REALTORS® Confidence Index showed:
- In July 2021, 27% of buyers waived inspections. By December, only 19% did.
- Appraisal waivers also dropped—from 29% in June 2021 to 21% in December.
As the market cooled, buyers gained a bit more leverage and felt less pressure to gamble with waived safeguards.
Do Contingent Deals Fall Apart?
Not as often as you might think.
A Rocket Homes report revealed that only 5% of contracts were terminated before closing in mid-2021. The top reasons? Failed inspections and financing hiccups.
That means most contingent offers actually make it to the finish line, even if there are bumps along the way.
How Contingencies Can Affect Price
Contingencies aren’t just about protecting buyers—they can influence the financials, too.
A study from CESifo found that:
- Sale-of-property contingencies often lead to a 2.1% discount
- Third-party approval clauses can push prices down by 3.3%
- Backup contracts, on the other hand, can create a 2.2% premium
Sellers generally prefer clean offers with fewer strings attached, since certainty tends to command a higher price.
Tips for Buyers and Sellers
For Buyers:
- Don’t ditch contingencies without serious thought. They’re your safety net.
- Get pre-approved before making an offer—it strengthens your position.
- Work closely with your agent to craft a smart, balanced offer.
For Sellers:
- Review the buyer’s financing carefully before accepting.
- Set clear deadlines for contingencies to be resolved.
- Keep backup offers in your back pocket in case the first deal unravels.
The Bottom Line
When you see the word “contingent” on a listing, don’t panic—it simply means the house is under contract but waiting for certain conditions to be met.
For buyers, contingencies provide protection and peace of mind. For sellers, they’re a reminder that the deal isn’t done until the ink is dry.
At the end of the day, understanding what “contingent” means gives you a powerful edge in the home-buying or selling process. Because in real estate, knowledge doesn’t just close deals—it keeps surprises (and stress) to a minimum.
