CONTINGENT OFFER: Definition And Explanation

contingent offer
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The contingent offer is not alien to real estate agents, buyers, attorneys, and companies. Most often than not, it safeguards their interest against sellers and employees. To the buyer, his deposits are safe and he can easily walk away from a deal while the employer protects his company’s image. This guide looks at what a contingent job offer is, how to beat an existing offer on a house, and everything you need to know about a contingent offer.

No one wants to lose out on anything tangible. A buyer who sees a worthwhile house on sale wants to purchase it. As a result, he comes up with various schemes to convince the seller. He goes as far as making deposits to secure the building. Also, an employer would not want a staff that will tarnish their company’s image, so he presents employees with a contingent offer while he runs a background check on them. What exactly is a contingent offer? Let’s see

What is a Contingent Offer?

We will look at this from two perspectives. Contingency offer on a house and a job. However, both have the same meaning and effect. The contingency offer is a condition that allows a buyer or an employer to easily walk out on a deal. To the buyer a house deal and the employer, a job offer to candidates. To further buttress this point, we will take them one after the other.

Contingent Offer for a Job

Anyone who receives a job offer will be extremely glad especially when the paycheck is mouth-watering. Unfortunately, the feeling is not mutual with someone who receives a contingent job offer. With a contingent job offer, it is rather too early to celebrate. Why? Because contingent job offers are conditional.

What Is a Contingent Job Offer?

A contingent job offer is a written or verbal condition that permits an employer to withdraw his job offer if, in the course of running a check on the employees, he is dissatisfied. Let’s look at it in a simpler way, Doughlas company gives Adam Smith a contingent job offer. One of the conditions that must be met is this, ” Doughlas is a construction firm, therefore, it doesn’t want employees with short-sightedness. Adam Smith will undergo check-ups for his eyes and if the result is positive, the job offer will be withdrawn.

Organizations use it to secure job candidates and run a check on their background, health status, and any relevant information they need. In some circumstances, the conditions linked to job offers are only formalities, while in others, they might pose serious difficulties in securing employment. Putting it subtly, it is a condition an employee must meet before fully receiving a real job offer. Falling short of these conditions disqualifies the candidate. It is used in permanent positions, contract jobs, internships, and so on.

Why Do Employers Use Contingent Job Offers

The following are some of the reasons why employers used contingent job offers.

#1. To Verify Employee Qualifications

When an employer makes a contingent employment offer, they can hire someone before conducting a reference check to confirm the applicant’s past work history and educational background.

#2. To Get The Best Talented 

Companies also used it as a means to give employees the time to relocate if they stay very far away from where the firm is located. So businesses may get top talent while also using contingency to hold off on hiring them until they have a chance to meet and assess their personality qualities in real life before making a formal offer.

#3. To Know Employees’ Health Status

Candidates who accept contingent employment offers can be required to undergo a medical checkup before they can be officially hired by the business. It enables them to determine if a candidate is healthy enough to perform the tasks of various positions through the examinations.

#4. To Determine Employees’ Criminal History

To find out if an applicant has a history of criminal activity. Candidates are often given conditional job offers while criminal background checks are being completed. This helps firms lock in top talent while they wait for the results. The assessment helps confirm that they have not been convicted of any crimes that disqualify them from holding the post. 

Advantages of a Contingent Job Offer

The following are some of the advantages of conditional job offers 

#1. It protects the organizational image

The background assessment on health, criminal records as well as other shield employers from people who would have amassed liability for them.

#2. Employers’ willingness to hire

The contingent job offers demonstrate an employer’s willingness to hire you, even if specified tests or checks have not been completed.

#3. Open options

Contingency job offers don’t promise employment until all checks are returned, so you can keep applying to other companies and attending interviews. Temporary employment is critical if you are still waiting to hear back from your top career choice. This will give you more time to find something else.

Disadvantages of a Contingent Job Offer

Accepting a contingent employment offer may have some drawbacks, such as:

#1. Uncertain hope

A job seeker who receives a contingent job offer receives a glimpse of hope, waiting in the expectation that he will receive positive feedback from the company. Sometimes, their little ray of hope was dimmed because the job offer still didn’t come.

#2. Limited job offer

If you accept a contingent offer, you may not be guaranteed a long-term position. Particularly for highly qualified professionals, some contingent employment offers have defined start and end dates. But you can use the opportunity to gain more experience, broaden your professional contacts, and make money.

#3. There is a possibility of a limited amount of employment.

If you accept a contingent offer, you may not be guaranteed a long-term position. Particularly for highly qualified professionals, some contingent employment offers have defined start and end dates. But this will help you gain more experience, broaden your professional contacts, and make money.

Common contingencies

Employers use numerous distinct contingency variables and checks to determine a candidate’s eligibility to work at their organization. 

Types Of a Contingent Job Offer Checks

Some of the background checks done on candidates are as follow;

#1. Physical exam

Physical examinations are required by some businesses to ensure that their employees are physically capable of doing their tasks.

#2. Relocation

Contingent employment offers take this into account as well. Before starting a career with a firm, prospective employees must be able to travel and find a place to live if they currently live too far away.

#3. Drug test

Employers also conduct drug testing to keep tabs on their workers’ overall health and well-being. Before starting new employment, a prospective employee may be required to submit a urine or blood sample to a drug testing institution.

#4. Commercial driver’s license

A commercial driver’s license may be required for some jobs. The permit and any applicable paperwork must be shown to the employer, or the candidate must complete the training required to obtain the license.

#5. Background checks and fingerprinting

Background checks and fingerprints are used by employers to verify criminal records. Because background checks take time to process and fingerprints must be collected if a candidate isn’t already in the system, this is a prevalent factor in contingent job offers.

#6. Credit Score Check

As part of a contingent employment offer, certain employers may require a credit score check. This is especially true for jobs in which employees may be required to deal with money or make purchases with a business credit card regularly.

#7. Reference Check 

During or during an interview, an employer is likely to ask for references’ contact information. There are many benefits of conducting reference checks, including verifying an applicant’s education and work experience.

What to Do if You Get a Job Offer That Is Contingent on You Meeting Certain Conditions.

If you accept a job offer that is contingent, here are some things to keep in mind:

#1. Be grateful for the Offer

Please accept the offer. In addition to enhancing your professional credibility, thanking an employer after accepting a contingent job offer is a way to show your appreciation for their efforts.

#2. Inquire about When Feedback Will Be Ready

Inquire as to when you might expect a response from the company. Request the duration it will take to run checks on your background, reference, and credit checks. Having a specific date on which to follow up with them is critical.

#3. Stay Positive

Employers are more likely to be interested in employing someone who has a contingent job offer than someone who has been offered a full-time position after completing the regular hiring process.

#4. Review the Terms and Conditions of the Offer

Reviewing your offer terms and conditions will help you ensure you are ready and not caught unaware.

Contingent Offer On A House

 A contingent offer on a house is a conditional agreement that binds a buyer with a seller if certain conditions are met. Buyers often put conditions in place to allow themselves the option to walk away from a real estate deal without losing money if something goes wrong. That way, they get their money back in case they decide to back out of the deal.

When a buyer is unsure if they will be able to afford the property, they may make a contingent offer. However, if the buyer is concerned that the property is overvalued or in poor condition, a contingent offer may also be made. As a seller, accepting the contingent offer on your house is entirely up to you. Real estate agents have an extensive understanding of the market and the properties they represent, so they can assist you to select what contingencies to put in your contract.

How Does Contingent Offers On A House Work?

The contingency offer on a house is a clause used by buyers when they are interested in purchasing a property. Although the seller reserves the sole right to accept, reject or even make a counteroffer which of course, terminates the buyer’s first contract.

The contingency offer on a house is mostly drawn by a real estate agent or an attorney. They also aid the transaction process. Depending on the property in question, the realtor usually advises the buyer and at their demand, the conditional contract is drawn.

On the side of the seller, a listing agent will inform the seller about the offer. He also goes through the contract, advises the seller on whether to accept the contingent offer made on his house and negotiates with the buyer or his agent. 

What Happens When a Seller Accepts a Contingency Offer on a House?

When a seller considers accepting a buyer’s contingent offer on a house, then he has to do one of two things.

  1. The first is to remove the property from the market if he thinks the conditions will be met.
  2. The second option the seller has is to draw up a kick-out clause. The kick-out clause in the sales contract allows the seller to keep their property up for sale while they wait for a better offer. However, if the latter is the case, the seller must allow the first buyer time to purchase the property at the said price. When both parties reach an agreement, they draw a contract on the house in question.

What is a Kick-out Clause?

A kick-out clause permits the seller to remove the buyer from the deal. However, this only happens if the seller receives an offer that does not have a sale and settlement contingency.  Also, the seller can inform the buyer about the new offer to see if they can remove the contingency on their offer. Removing this solely depends on the buyer but if he decides not to remove the seller can accept the new offer.

Types Of House Contingency

Someone who wants to buy a house will make a contingent offer on anything, however, no laws bind a seller to accept every condition in an offer. Before signing a contingent offer, all parties must agree on all contingent. 

Let’s take a look at some of the contingencies on a house.

#1. Inspection Contingency

The home inspection contingency allows the buyer to walk away from their contingent offer if the home inspector discovers problems during the inspection. The cost of inspecting a house is entirely on the buyer because it is to his benefit. Generally, inspection takes a few days to complete after the offer has been made. While it is ongoing, the smart buyer will always contact an expert to examine the house for insects and mold. After the inspection, the buyer decides whether he is still interested in the deal or not. 

Benefits Of Inspection Contingency House 
  • Inspections can identify major, unexpected concerns with a property that may affect a buyer’s desire to acquire the property.
  • Having a house inspection clause in a sales contract gives purchasers the option of canceling the transaction or renegotiating the price.
  • Buyers can also demand the seller fix the repairs or reduce the price with the result of their findings. 

#2. Appraisal Contingency  

Appraisals are required by lenders before they agree to provide money. Appraisal contingency can have an impact on how much money you can get. Lenders demand this to avoid lending more money than a property is worth.  Buyers are still obligated to pay the agreed-upon price even if the appraisal is lower than the purchase price. However, adding the appraisal contingent offer on a house permits the buyer to cancel the contract. If this was not included, then he will remain bound to the agreement.  However, the buyer has the right to keep their down payment if the property does not appraise for the price agreed upon. Finally, the appraisal must be within the time frame. Failure to do, the buyer will not be able to back out of the contract. 

#3.  Mortgage Contingency

A buyer may want to buy a house with a mortgage. This means he will go through the scrutiny of the mortgage lenders to ensure he gets the loan. If a buyer intends to buy the house with a mortgage, he must include it in his offer. 

The mortgage contingency is also known as financing contingency. If a buyer intends to secure a mortgage to purchase the house, he must include it as a clause in his contingent offer. Why is this necessary? A buyer could lose his initial deposit if he did not include this in his offer. Especially when he did not get the mortgage he intended to use and secure the loan. A buyer can be preapproved for a loan but still not get it at the end of the day. However, buyers who intend to use the financing mortgage contingency must ensure that he stipulates the duration. Once it exceeds that time frame and he did not get the loan, he loses his money to the seller. 

#4. Title Contingency

Usually, you will find the history of the house in a title report. This clause stipulates that the home purchase will not go through unless the title report confirms that it is free and clear of any mortgages or other liens.

#5. Home Sale Contingency

The home sale contingency means that the buyer will acquire the new property and the deal will proceed if they sell their existing home on a particular date. The buyer must be able to sell their current house before they may buy a new one. He will receive a deadline under this contingency to sell the existing house. So long as they don’t find a buyer in that time frame, they have the option of withdrawing their offer and getting back their deposit, with no repercussions.

Types of Home Sales Contingency

There are two types of home sale contingency

 #1. Sales and Settlement

The sales and settlement means the buyer has a house but is yet to receive an offer

#2. Settlement

The settlement sale contingency means the buyer has a house, and has received an offer but is yet to close the deal.

How to Beat a Contingent Offer

Is it possible to beat an existing contingent offer? It depends on what the offer is all about. For instance, you cannot beat a job contingent offer, you can only try to meet the condition. However, it is very possible to beat the contingent offer on a house. How so, let’s explore the various ways one can beat a contingent house offer.

#1. Get Mortgage Preapproval 

The first step on how to beat a contingent offer is to get your mortgage approval. This will not be necessary if you are not buying the house with a mortgage loan. But if you intend to buy the house with a mortgage, you need to get preapproval before presenting your contingent offer on a house. Your mortgage preapproval simply means you have a clear credit record and good financial records.

#2. Waive Conditions in Your Offer

The second way to beat a contingent offer on a house is to adjust your conditions. Waiving conditions make you active. If you decide to do this, ensure you discuss it with your real estate agent. This is because there is a need to verify the overall health condition of the house before doing this and it is a huge risk too.  You can waive the contingencies on appraisal, financing, or home sale. Furthermore, ensure you include any part of the deal that will possibly protect you in case things did not turn out well eventually. 

#3. Offer to Increase the Initial Deposit

When you offer to pay a high first-time deposit, you put the seller in tension. Increasing your earnest money deposit is an excellent strategy to make a strong first impression on a prospective employer. Sellers see this as a sign of your commitment and willingness to put your money where your mouth is. 

#4. Make a Compelling Offer

Intentionally increasing your offer above the ranges in the market is another way to beat a contingent offer.  Alt alternatively, you may want to include an escalation clause that automatically increases your price if someone outbids you. However, remember to place a cap on your offer. 

#5. Add Appraisal Gap Guarantee

The appraisal gap guarantee is yet another intellectual way to beat the contingent offer. Appraisals that are too low and are rather common in today’s hot market. Sellers are naturally concerned about this since they don’t want you to walk away from the sale if the home is undervalued. However be careful, because if things don’t go well, you will not be able to get back your deposit.


The contingent offer is usually handy to users especially if the deal fell through. Although most sellers prefer to receive offers without contingency attached to it, potential employees would love a job offer rather than a conditional one. You still need to protect yourself.

FAQs On Contingent Offer

Does a contingent job offer means i will get the job?

Not really, it is a conditional offer. This simply means it is a 50-50 chessboard. If the company’s conditions are met, you may get the job. But if it is not met, you will not be able to.

Must buyers add contingency to their offer?

If you think the property is worth the risk, then you do not have to add contingencies to the offer. However, not adding it will help you beat a contingent offer.

How Long Is a Contingency Period on a House?

Contingency periods can be as short as one day or as long as a year, depending on the nature of the event. Inspection may take up to 10 days or more while the contingency period may take up to 30- to 60-day mortgage or finance contingency period is normal.

What’s the Difference Between Contingent and Pending?

According to real estate listings, a property’s status might be indicated by using the terms “continued” and “pending”. Contingencies refer to requirements that need to be completed before a sale can be finalized after an offer has been accepted by the seller and a contract has been signed. either 12 or pending

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