If you’re curious what contingent means when selling a house in North Carolina, you’re not alone. Seeing “contingent” on your property’s status would certainly be reason to stop and wonder. The real estate market moves at a blinding pace, and knowing what this means can make a big difference.
When a buyer’s offer has been accepted, the sale will often include certain contingencies. These are specific conditions that need to be met before closing can be completed. Knowing how contingencies work can help you make much better decisions. So, we’ve created this guide to get you the information you need for a successful sale.
Understanding What “Contingent” Means in Real Estate
When it comes to real estate transactions, a contingent offer means the property is under contract, but not yet fully sold. Whenever a home is marked as contingent, it means the seller has accepted an offer, but the home sale ultimately depends on satisfying the contingency clause.
Some of the contingencies included are going to be more or less standard in real estate transactions. They will typically relate to financing, appraisals, or property inspections. If, for example, a home has an inspection contingency, it allows the buyer to get a full review of the property’s condition before moving forward. Likewise, a mortgage contingency ensures the buyer can secure financing from their mortgage lender.
During this period, the home may stay listed on the MLS, or multiple listing service. On the listing, however, it will be notated as a contingent property. This still lets the seller accept backup offers, in case the current deal falls apart. Depending on recent market trends, you may want one or more backup offers readily available.
Working with a real estate agent can help you manage communication between multiple parties. With input or updates coming from buyers, agents, and more, you want to make sure your MLS listing is always up to date.
How a Contingent Sale Works When Selling a House in North Carolina
When the seller has accepted a buyer’s offer, the property then moves from “active” to “contingent”. This means it’s under contract but not closed or legally transferred. This period lets both parties fulfill any contingencies in the purchase agreement. These might be inspections or financing reviews.
In most real estate transactions conducted in North Carolina, the process can only begin when the buyer submits an offer. This offer is usually accompanied by an earnest money deposit.
When the seller has accepted the offer, the listing indicates there’s a contingent offer. During this stage, the buyer will usually work with their mortgage lender and inspector to make sure any preliminary steps are handled.
Skilled real estate agents keep communication clear and open between all parties. They’ll track deadlines and follow up where needed to make sure all conditions have been met. If this deal falls through, sellers can still accept backup offers they’ve received in the meantime. As you prepare to move further toward closing, be sure you understand local property tax and transfer rules.
Common Types of Contingencies
Contingencies exist to protect buyers and sellers from surprises before closing. They’re written directly into the sales contract and outline specific conditions that must be met for the transaction to move forward. Let’s take a look at some of the most common ones you’ll encounter in North Carolina.
Inspection, Appraisal, and Financing Contingencies
A home inspection contingency is one of the most common contingencies and is part of almost every home sale. This contingent offer gives the buyer time to have the property evaluated for potential issues. If the inspection reveals that any major repairs are needed or safety hazards, it may derail the offer if they can’t be fixed quickly enough for the buyer.
A mortgage contingency, also known as a financing contingency, lets the buyer cancel the deal without penalty. If their mortgage loan falls through or can’t be underwritten in time, the buyer can back out.
Home Sale and Title Contingencies
A home sale contingency applies when the buyer must sell their existing home first to fund the new purchase. This can extend the timeline, but doesn’t always deter sellers, especially in balanced or slower markets.
Finally, a title contingency ensures there are no legal claims or unpaid liens against the property. If an issue arises, the seller must resolve it before the sale can close. Together, these common contingencies protect both parties and keep the entire home-selling process transparent.
Contingent vs Pending: What’s the Difference?
You might see the terms “contingent” and “pending” in relatively proximity. Knowing what each means is crucial, because they may appear side by side, but they mean very different things.
When a home is contingent, the seller has accepted an offer, but the contractual obligations haven’t yet been fulfilled. There are contingencies in the purchase agreement that haven’t been met.
A pending status means that all contingent status items have been addressed or satisfied. Once a property is listed as pending, it is now moving toward closing. At this stage, the buyer and seller are typically finalizing paperwork for the home purchase. Things like confirming the mortgage loan details and prepping for the transfer of ownership.
While you’re browsing properties, you may also see a pending short sale or a contingent short sale. These indicate that the transaction will likely need additional lender approval. Despite the name, a “short” sale can take several months.
Can a Seller Accept Another Offer on a Contingent Home?
Even if your property is listed in contingent status, you may still be able to accept backup offers. These are offers from interested potential buyers standing by in case the current contract falls through.
The kick-out clause is another highly useful tool for sellers. This lets a seller keep marketing their home and accept a new offer. However, this is only if the original buyer doesn’t meet all of the contingency requirements. If this happens, the first buyer can choose to either remove the contingencies or walk away.
What Happens If a Contingent Offer Falls Through?
No matter how hard you try, the most well-planned real estate transactions can have challenges. When a contingent offer falls through, it’s usually because one or more of the required contingencies weren’t met.
Some of the most common contingencies that cause a deal to fail are the home inspection or the buyer’s financing. If the buyer fails to satisfy one or more contingencies, the deal can be cancelled without penalty. The earnest money deposit can be returned or forfeited, depending on the purchase agreement.
When the market is more competitive, having backup offers means you can transition back to active status much more quickly and easily. Keeping in close contact with your real estate agent can also help you stay priced and marketed effectively.
Should You Waive Contingencies to Sell Faster?
So, if contingencies mean possible delays, won’t waiving contingencies speed things up? While it can be tempting, it’s also critical to understand the potential risks. Remember that contingencies are there to protect the buyer and the seller, and removing those protections can have consequences.
You can reasonably cut out the financing contingency or home sale contingency by working with a cash buyer. Since they don’t need financing, it’s not an issue.
However, not all contingencies can be skipped. The appraisal contingency and inspection contingency are both important. They should only be removed under the guidance of an experienced real estate agent.
Step-by-Step: How Sellers Can Navigate a Contingent Sale
Selling a home with contingencies requires careful coordination and a clear understanding of each step. Here’s how North Carolina homeowners can deal with the process smoothly, while staying in control from start to finish.
Step 1: Review contingencies and deadlines
Start by reading the sales contract closely. Understand each contingency clause, the timeframe for completion, and what happens if those requirements aren’t met. Knowing your obligations and rights helps you avoid surprises later.
Step 2: Communicate with your agent and buyer
Keep in touch with your real estate agent, who will update you on progress with the buyer’s mortgage lender and any outstanding inspections or approvals. Consistent communication ensures all parties stay on track and builds trust throughout the real estate transaction.
Step 3: Keep backup offers in mind
Even when your home is under contract, it’s smart to remain open to backup offers. If the current deal falls through, having another buyer ready can help you maintain momentum and avoid re-listing delays.
If you’re in Jacksonville, you can sell your house fast with a cash offer from ILM Home Offer. Our team makes skipping the delays simple, with a direct sale that closes when you want it to.
Sell Your House As-Is for Cash with ILM Home Offer
Homeowners who want to avoid the hassle and potential delay of contingent listings should think about a cash buyer. Cash buyers like ILM Home Offer can skip the typical stress of real estate listings. No showings, no cleaning, no staging, no waiting on buyers or financing. Whether you’re in Burgaw or Wilmington, you can get a fair cash offer and close on a timeline that’s right for you.
Conclusion
Contingencies play an important role in the typical home sale process. But while they’re useful in some situations, they can also add delays to the timeline. If you’d rather cut those challenges out altogether, ILM Home Offer specialises in finding effective cash sale solutions for North Carolina homeowners.