Q:

What does "contingent" mean in real estate?

A:

Quick Answer

The term "contingent" in a real estate contract means that the sale cannot be completed and finalized until something specifically named has happened. Contingencies are common in the buying and selling of real estate.

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Full Answer

Both buyers and sellers use contingencies in real estate contracts. Common contingencies include home inspection outcome, appraised value determination and mortgage loan approval.

For instance, someone may make an offer to purchase a home contingent upon mortgage loan approval. This means that the buyer is stating that he will honor the contract to purchase the seller's home if the buyer's financing is approved. However, if the buyer does not obtain financing, he is not obligated to purchase the home.

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