If you’ve been browsing home listings, you might have come across a house labelled “Contingent” and wondered what that means. In a nutshell, contingent is just a fancy way of saying “sold, but only if certain things happen first.” The seller has accepted a buyer’s offer, but the deal isn’t final until some specific conditions are met.
If those conditions aren’t met, the buyer can walk away without penalty, and the house often goes back on the market. In this post, we’ll break down the concept of contingent status in simple, relatable terms, go over common contingencies (like financing and inspections), and explain what it all means for buyers and sellers.
A “Sale Pending” sign outside a home listed for sale. While pending status often indicates all contingencies have been met and the sale is on track to close, a contingent status means the sale depends on certain conditions being fulfilled first. In both cases, the home is not fully available to new buyers, but a contingent home still has outstanding steps or issues to resolve before it can move to pending (or sold) status.
Understanding “Contingent” Status in Home Listings
In real estate, contingent literally means “depending on certain circumstances.” A home marked as contingent on a listing site indicates that an offer has been accepted by the seller, but the sale is conditional – some things still need to happen (or be checked) before the deal can close.
Think of it like an “under contract with a catch” situation. The buyer and seller have agreed on a price and terms, but there are safety nets in place (contingency clauses) that must be cleared for the sale to become final.
Example: Imagine you agree to buy a house built in the 1940s, but you make your offer contingent on a satisfactory home inspection. The old home has knob-and-tube wiring, which is outdated and potentially unsafe. Your contingency says that unless the electrical system is updated (or no major issues are found), you’re not obligated to go through with the purchase.
If the inspection shows the wiring hasn’t been updated and the seller won’t fix it, the contingency gives you the right to walk away and get your deposit back. In short, contingencies protect the buyer from being stuck with a deal if something important doesn’t check out.
Why do listings show “contingent”? It’s basically a heads-up. When a home is marked as contingent, it tells other potential buyers that “we have a deal, but it’s not a done deal yet.” The seller has accepted an offer, but because of those remaining conditions, the sale isn’t 100% locked in. Many real estate transactions include contingencies – in fact, about 82% of buyers include at least one contingency in their purchase offers.
So it’s very common for a house to go into contract contingent on certain things like inspections or financing. The listing stays active (sometimes noted as “active contingent”) to allow for those conditions to be resolved, and often the seller may still permit showings or entertain backup offers (just in case the first deal falls through). Once all the contingencies are satisfied, the status typically changes to “pending”, meaning the sale is moving forward toward closing.
Common Contingencies in a Home Sale (and How They Work)
Let’s break down a few of the most common contingencies you’ll encounter in real estate contracts. A contingency is essentially a clause in the purchase agreement that says, “this sale will only proceed if X happens.” These clauses act as safety nets for the buyer (and sometimes for the seller too), ensuring that certain important conditions are met first. Here are four common types of contingencies and what they mean:
Financing Contingency (Mortgage Approval)
One of the most common contingencies is the financing contingency (also called a mortgage contingency). This means the buyer’s offer is dependent on getting approved for a home loan. Even if a buyer has a pre-approval letter, the lender will thoroughly underwrite the loan after the contract is signed – verifying the buyer’s income, employment, credit score, debts, etc. If something changes during this process (say the buyer changes jobs, takes on new debt, or interest rates jump), the lender could deny the mortgage.
A financing contingency protects the buyer in this scenario. If the loan ultimately isn’t approved, the buyer can back out of the deal and reclaim their earnest money deposit. From the buyer’s perspective, this is crucial – you don’t want to be forced to buy a house if you can’t get the financing! For the seller, a financing contingency introduces some uncertainty: the deal won’t close unless the buyer’s funding comes through.
(Sellers are generally aware that most buyers need a mortgage, so this contingency is very common. Still, a cash buyer or someone who waives the financing contingency might be more attractive to a seller since there’s one less hurdle to clear.)
Home Inspection Contingency
Another typical condition is the home inspection contingency. This allows the buyer to hire a professional inspector to examine the property top to bottom – looking at the roof, foundation, plumbing, electrical, HVAC, and more. After the inspection report comes back, the buyer has options. If only minor issues are found, things usually move ahead.
But if major problems or safety concerns turn up (for example, a cracked foundation or a serious mould issue), the buyer can request repairs or negotiate credits with the seller. If they can’t reach an agreement on how to address the problems, the buyer can walk away from the deal without losing their deposit, thanks to the inspection contingency.
For buyers, this contingency is a vital protection – it prevents you from being stuck with a house that has expensive hidden issues. Most problems that come up in inspections are minor and can be worked out, but occasionally an inspection can delay or derail a deal if the issues are serious and no compromise is reached.
Interestingly, in very hot markets, some buyers choose to waive the inspection contingency to make their offer more appealing, but this is risky – you’re essentially agreeing to take the home as is, problems and all.
Appraisal Contingency
An appraisal contingency is often included when a buyer is using a mortgage to buy a home. It says that the home must appraise for roughly the purchase price (or more) for the sale to proceed. Lenders require an independent appraisal to make sure they’re not lending you more money than the house is actually worth on the market
Why does this matter? Imagine you agreed to pay $450,000 for a house, but the appraisal comes back and says it’s worth only $440,000. Now there’s a $10,000 gap. In this situation, the appraisal contingency gives options: the buyer can ask the seller to lower the price to $440K, or the buyer could bring extra cash to cover the difference, or some middle ground in between. If buyer and seller can’t reach a new agreement on the price, the buyer can cancel the contract and get their deposit back due to the appraisal contingency. This protects buyers (and lenders) from overpaying for a property.
Low appraisals do happen and are a common reason that closings get delayed. According to data from the National Association of Realtors, appraisal issues accounted for about 6% of closing delays in recent surveys. In booming markets where bidding wars drive prices up quickly, appraisal contingencies become especially important (since there’s a greater risk the appraisal will come in below the agreed price).
Home Sale Contingency (Sale of Current Home)
A home sale contingency (sometimes called a sale-of-current-home contingency) is a condition you’ll see when the buyer needs to sell their existing home before they can finalise the purchase of the new home. Basically, the deal is contingent on the buyer’s ability to sell their house by a certain date. If the buyer’s home doesn’t sell in time, this contingency allows them to back out of the purchase without losing their earnest money.
This contingency obviously provides important protection for buyers who don’t want to end up owning two homes at once (or who need the proceeds from the first sale to fund the new purchase). However, home sale contingencies are the least popular with sellers. From the seller’s point of view, a sale contingency introduces a big “if” into the equation – “my house will only close if and when this stranger manages to sell their own house.” That’s a lot of uncertainty.
Sellers who agree to a home sale contingent offer will often include a kick-out clause or right-of-first-refusal in the contract. A kick-out clause means the seller can keep marketing the home to other buyers, and if a new (non-contingent) offer comes along, they give the first buyer a short window (e.g. 48 hours) to either drop the contingency (i.e. proceed without selling their home) or step aside so the seller can accept the other offer.
This way, the seller isn’t stuck in limbo for too long. From a buyer’s perspective, if your offer is contingent on selling your current home, be aware that the seller may insist on such a clause to protect themselves.
How Contingencies Affect Buyers and Sellers
In any contingent deal, buyers and sellers have different stakes and concerns. Let’s look at how contingencies impact both sides:
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For Buyers: Contingencies are basically your safety net. They protect you from losing your deposit or being forced to buy a house that has serious issues or that you can’t afford in the end. In other words, contingencies ensure you won’t be stuck buying a home if something major goes wrong – you have an “out” without penalty. This gives buyers peace of mind to move forward. The flip side is that adding lots of contingencies can weaken your offer in the eyes of a seller. In a competitive market, sellers might favour a bid that has fewer strings attached. (For example, offers without an inspection or with no home sale contingency could beat yours if the seller values a quicker, more certain closing.) Still, as data shows, most buyers do include some contingencies because it’s important to protect yourself. It’s all about finding the right balance for your situation.
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For Sellers: Contingencies can feel like “strings attached” to the deal. Each contingency is basically a condition where the buyer could back out, which introduces uncertainty for the seller. The majority of home sales will have one or two standard contingencies (financing, appraisal, etc.), and experienced sellers know this is normal. However, a contingency does mean the house is not sold yet – there’s that chance the deal could fall through, and the seller would have to start over to find a new buyer. If a seller receives multiple offers, they will likely lean toward the one with the fewest contingencies or the most reasonable contingencies. (After all, an offer that’s contingent on seven different things is much more fragile than one that’s only contingent on, say, financing and a basic inspection.) In a hot seller’s market, buyers sometimes waive contingencies to sweeten the deal, because sellers favour offers with fewer strings attached. On the other hand, in a slower market with fewer buyers, sellers might accept offers with more contingencies because they can’t afford to be choosy. In any case, from the seller’s perspective, fewer contingencies often means a more straightforward path to closing.
Do Contingent Deals Fall Through Often?
The good news: Most contingent sales make it to closing. Having contingencies in a contract does not mean the deal is likely to fail – it just means precautions are in place. In fact, only a small percentage of home purchase contracts end up falling apart. According to recent data from the National Association of REALTORS®, only about 5–6% of home purchase contracts get terminated before closing. That means roughly 94 out of 100 sales close successfully, even if they had contingencies. The odds are definitely in favour of the deal going through.
However, contingent deals can fall through occasionally, and it’s usually because one of those contingency conditions wasn’t met (or uncovered a big problem). Here are some common reasons a home sale might fall apart due to contingencies:
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Financing issues: The buyer’s mortgage approval falls through (for example, a change in job or credit means the loan is denied). If the buyer can’t secure financing, the deal can’t proceed.
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Low appraisal: The home appraises for less than the agreed purchase price, and the buyer and seller can’t agree on adjusting the price or bridging the gap. With an appraisal contingency in place, the buyer may walk away if no compromise is reached.
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Inspection problems: The inspection reveals major defects or needed repairs, and the seller isn’t willing to fix them or offer credit. If they hit an impasse, the buyer can cancel the contract per the inspection contingency.
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Title or legal issues: Problems with the title (such as liens or ownership disputes) come up, and they can’t be resolved on time. A title contingency would allow the buyer to back out rather than inherit those issues.
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Home sale contingency expires: The buyer’s own house didn’t sell by the deadline, so the contingency wasn’t fulfilled. The buyer then opts to cancel the purchase of the new home (or the seller invokes a kick-out clause to pursue another buyer).
It’s worth noting that occasionally a sale falls through for reasons outside these contingencies – for instance, a buyer simply gets cold feet. But when a listing is marked contingent, the primary worry for both parties is navigating those specified contingency clauses.
The vast majority of the time, if both buyer and seller are motivated, they will resolve the issues (get the financing in order, negotiate repairs or price changes, etc.) and proceed to closing. Contingencies just make sure that if they can’t resolve an issue, everyone can exit the deal fairly.
What To Do if You’re Interested in a Contingent Home
So you’ve found your dream home… but it’s already listed as “contingent.” What now? The key is not to lose hope. Contingent doesn’t mean sold! It means there’s an accepted offer with conditions attached, and there’s still a chance (however small) that the deal could fall through. Here are some steps you can take if you’re interested in a contingent home:
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Talk to your agent and get the details: Have your real estate agent reach out to the listing agent to understand the situation. Sometimes “contingent” can come with additional labels (like “contingent – continue to show”). Find out what the contingencies are – is the buyer waiting on financing approval? An inspection? The sale of their current home? Knowing the context will help you gauge the likelihood of the deal closing and how long it might take.
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Go see the home (if you haven’t already): Often, sellers will still allow showings on a contingent listing, especially if they have a kick-out clause or are open to backup offers. It won’t hurt to look at the house even though it’s under contract. If you tour the home and decide you absolutely love it, you’ll be prepared to act if it becomes available again. Plus, seeing it helps you decide if you’d want to be a backup offer.
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Submit a backup offer: If you’re serious about the home, you can work with your agent to make a backup offer. A backup offer is essentially an offer that the seller can fall back on if the first deal collapses. The seller can’t sign a second contract while the first is active (unless the first is terminated), but they can officially accept a backup offer that automatically kicks in as the primary contract if the initial buyer backs out. This way, you’ll be first in line to get the house if the current contingent sale fails. Even if the seller isn’t formally accepting backups, let it be known that you’re interested – sometimes if the first deal wobbles, the seller might reach out to see if you’re still willing to buy.
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Be patient (and keep your search going): This part is important. In many cases, the original contingent deal will go through to closing, so you don’t want to put all your eggs in one basket. Anticipate the first contract will likely succeed, and continue looking at other homes just in case. If you’ve made a backup offer, great – now let it play out. And if you end up finding another house in the meantime, you can always withdraw your backup offer. The idea is to stay prepared but not idle. Should the contingent deal fall apart, you’ll be ready to move forward (and having already seen the home, you’ll be a step ahead).
Remember, a “contingent” label can change to “pending” or even back to “active” (available) depending on how things unfold. It’s a waiting game, but with the right strategy and a bit of luck, you might still snag that home. And if not, there are always new listings coming up – so keep an open mind.
Final Thoughts
In real estate, contingent status is nothing to be afraid of – it’s basically a built-in process to make sure everyone gets what they need before a sale is finalised. For buyers, contingencies provide crucial protections (you won’t lose your deposit if a deal-breaker issue arises). For sellers, a contingent offer means you’ve got a willing buyer, but you’ll need a bit of patience while the conditions are addressed.
Homes are marked contingent because real estate deals have moving parts – inspections, appraisals, financing, and sometimes other transactions – that all need to line up. The vast majority of the time, those pieces fall into place and the sale proceeds smoothly. And if they don’t, that’s what the contingency was there for!
So next time you see a home listed as “Contingent”, you’ll know it’s halfway home – spoken for, but not a done deal. It might become available again, or it might march on to closing. Either way, understanding contingencies will help you navigate the process with more confidence, whether you’re a hopeful buyer or a seller evaluating offers.
Real estate can have its curveballs, but a little knowledge (and a good agent by your side) goes a long way in turning that “contingent” status into a successful sale. Good luck, and happy house hunting!
Sources
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Cathie Ericson, Rocket Mortgage – What does contingent mean? (Sep 25, 2024)rocketmortgage.comrocketmortgage.com
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Mekaila Oaks, Redfin – How Often Do Contingent Offers Fall Through? (Aug 19, 2025)redfin.comredfin.com
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Meredith Arthur, Zillow – What Are Real Estate Contingencies? (Aug 22, 2025)zillow.comzillow.com
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Bankrate – Top Reasons Home Sales Fall Through (Mar 20, 2023)redfin.com
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Rocket Mortgage – Should I look at a house that’s contingent?rocketmortgage.com
