Contingent Offers: Definition and Detailed Guide

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Are you in the market for a new house or maybe you found one already? Well, finding exactly what you are looking for; the house of your dream, with your favorite color and your preferred location, is one thing. What about the house finance? Oh, you are still thinking about it? Or you’re not sure if your loan application will be a success. You plan to avoid losing the house, and at the same time avoid making an offer that is too high. Regardless, you must weigh the pros and cons and balance the equation. But now you don’t know what to do. You can adopt contingent offers. A contingent offer can give you some peace of mind when you make an offer on a house. However, what do you know about the contingent offer, and how does it work either on a house or for a job?

All you need to provide answers to all your questions have been detailed in this article. So let’s journey the world of contingent offers together. 

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What are Contingent Offers?

A contingent offer is an offer made on a property by homebuyers, which stipulates that distinctive conditions must be met before completing the sale. An offer on a house that is contingent on the buyer’s ability to get financing is an offer with a safeguard for the buyer. It’s clear from the clause that if it’s not met, the buyer has the option to walk away from the deal.

In another word, real estate sales contracts and purchase offers frequently include a home-sale contingent clause. The sale of the buyer’s house is a precondition to the deal going through. Therefore, when a buyer’s house sells on time, the contract is completed. However, if this does not occur, the contract is null and void. Likewise, if something goes awry in a real estate transaction between a seller and a buyer, these stipulations allow the buyer to walk away from the deal without losing any money.

Generally, it’s common for house buyers to make a contingent offer. This is especially when they’re unsure if they’ll have enough money to purchase a property. Also, when a buyer is concerned that the property valuation is too high or in poor condition, they may make a contingent offer.

Contingent Offer on a House

In general, a house buyer could make a contingent offer on various conditions. However, the ball is in the sellers’ court, he will have to decide on accepting such an offer or not. Before signing a contingent contract, both parties must agree on all of the contingencies that are in the contract.

You, as the buyer, have the option of including contingencies in the contract. And with the help of a knowledgeable realtor, you can determine which contingencies to include in your contract. This however depends on their knowledge of the property and market conditions.

Afterward, the seller can either accept or reject the contingent offer or make a counteroffer to remove the contingency from the offer.

Sellers typically have two choices if they accept a house contingent offer. The seller can remove their house from the market and wait for the contingency to be met. And secondly, they can adopt a kick-out clause in the sales contract. This allows the seller to keep their property up for sale while waiting for a better offer. However, if the seller gets a more promising offer, they must give their first purchaser a certain amount of time to purchase the property before moving on to the next buyer.

A good real estate agent or an attorney can help with this. A buyer’s agent will help the buyer decide if they should include a contingency in their offer. Write it up, and deliver it to the listing agent.

Types of Contingencies in Real Estate

 There are various contingent home buyers can include in their offers. However, let’s dig a little deeper into each of these;

#1. Inspection Contingency

Carrying out a house inspection after making an offer is common practice. In this case, a licensed professional inspect the interior and exterior of a home during a home inspection. However, this may affect the buyer’s desire to buy a home, or willingness to pay the asking price. This is if a home inspection reveals serious, unexpected issues with the property. The inspection will reveal what the buyer will face if they decide to purchase the property.

Because of this, the buyer is usually responsible for the cost of the inspection. Hence, it’s up to the buyer if they find something that’s a deal-breaker for him or her. A home inspection contingency usually gives buyers the option to back out of the deal or renegotiate their offer. Meanwhile, if the seller refuses to make repairs or lowers the purchase price, the buyer has the power to walk away from the deal. When a buyer and seller are unable to agree, the buyer has the option of walking away.

#2. Financing/Mortgage Contingency

An offer from a buyer who needs a mortgage to purchase property may include a mortgage contingency clause. If the buyer’s financing is delayed or fails, they can walk away from the deal and not lose their earnest money deposit because of this contingency. Generally, buyers must secure financing before signing a purchase agreement that includes a financing contingency, or mortgage contingency. That said, preapproval is a stronger signal than prequalification. Nevertheless, preapproval does not necessarily mean a buyer has been pre-approved for an actual mortgage. You can think of preapproval as a launching pad for your house hunt.

Even if you have a mortgage contingency accepted, you should still get preapproved for a loan in case of financing setbacks. This will speed up the process and reassure the seller that you will be able to secure a loan sufficient to cover the sale price of the home. At this point, a bank or lending institution examines the buyer’s finances and decides if they will lend to the buyer. The lender on the other hand has the option of rejecting a loan application.

#3. Home Sale Contingency

Generally, you can include home sale contingency clauses in an offer. However, this is if you as a buyer do not require financing but rely on the sale of their current residence to fund the purchase of a new one. The looks like the most dangerous and least likely scenario.

This typically involves the sale of one’s home as a condition of financing. The buyer basically will have a deadline by this contingency to sell their house. However, if a buyer fails to sell their current home, they don’t need to buy from the seller, as this clause stipulates. On the other hand, they can withdraw their offer and get their deposit back without any penalties. Because the sale of a seller’s home is contingent on the sale of another, this contingency is unlikely to be accepted.

#4. Appraisal Contingency

Lenders require an appraisal of a property before agreeing to provide financing. As a result, they’re making sure they’re not lending more than the house is worth. An appraisal contingency in this case affects the buyer’s financing process. Hence, the buyer has the right to keep their down payment if the property does not appraise for the price agreed upon. The home’s fair market value is determined by the appraisal process. This is so that buyers can avoid paying too much for their homes. or going into debt because of their mortgages by having an appraisal contingency in place. 

In addition, when buyers include an appraisal contingency in their offer, they can cancel the contract if the home appraisal is lower than the purchase price. As long as they include that contingency in their offer. In another word, a financing contingency and an appraisal contingency frequently work hand in hand. Generally, before a lender approves any financing they will need an appraisal of the house. Nevertheless, as a buyer, you are protected if you find yourself paying more than the home’s market value for the property you’re purchasing.

#5. Title Contingency

A title contingency will typically protect any seller who fails to clear up any liens on the property. The contingency stipulates that you must resolve any liens or title issues before the purchase of the property in question.

In addition, the title report is a critical contingency. It documents the history of ownership. Unless the title report shows that the property has no liens, the sale will not go through.

Typically, before finalizing the deal, a lawyer or a title company will check the house title. The institution will transfer the buyer’s title to them, free and clear if there are any issues after resolving them.

Title insurance may also be an option for a buyer. The insured buyer or lender receives compensation if the title is defective, there are liens, or there are competing claims of ownership after the closing. In the event of a title dispute involving the buyer’s property, it will pay for the buyer’s losses and cover any legal fees.

Contingent Offer for a Job

In contrast to traditional candidate screening, contingent job offers allow professionals to secure work in a short period. Before completing the vetting process, companies generally employ contingent job offers to acquire top-tier candidates. Nevertheless, you can better understand what it means to receive a contingent job offer. And at the same time, how to respond to an employer by learning more about contingent job offers. So,

What is a Contingent Job Offer?

A contingent job offer plays a vital role in assisting secure qualified job candidates. This process can also be called a conditional job offer. To ascertain a candidate’s suitability, they perform background checks, reference checks, and other evaluations. While there might be contingent job offers for specific permanent positions,  they are also prevalent in agency work, temporary jobs, skilled positions as well as internship opportunities.

Reasons Why Companies Might Use Contingent Job Offers.

For a variety of reasons, employers may use contingent job offers;

#1. To Verify the Credentials of a Candidate

A contingent job offer helps employers in securing a certain job candidate before actually conducting a reference check to verify their existing working experience and educational credentials.

#2. To Recruit Employees Before Relocating

Employers may offer a contingent job offer in securing candidates who live too far away to travel to work. This helps them acquire top-tier talent while also allowing them to hold off on hiring them till they can get to know them in person and evaluate their likable traits before making a final decision.

#3. To Ensure the Health of a Candidate

Candidates who accept contingent job offers may need to undergo a medical examination before they can officially secure a job from the employer. To make sure a candidate is fit for the job, medical tests like these can check their overall health.

#4. To Find Out if a Potential Employee Has a Criminal Record.

All applicants for certain positions may be subject to a criminal background check to ensure that they have not been convicted of any crimes that disqualify them from holding the position. A lengthy criminal background check during the hiring process necessitates the use of contingent job offers to secure the best possible candidates.


Buying a house is a significant financial commitment. Contingent offers on the other hand are an effective strategy for buyers who are concerned about specific unknowns. Contingent offers in a contract protect buyers by securing the sale but also by protecting them if they decide to back out of the sale after learning more about the property.

For buyers to sign legally binding contracts without fear of financial repercussions if they can’t meet the necessary conditions, they can make contingent offers. However, it’s wise to be selective about which clauses or contingencies you include in a contract. Keep in mind that sellers are often reluctant to accept contingencies. So, if you’re looking to purchase a home in a market where sellers are in control, you can expect to face stiff competition from other buyers for the same properties.

However, you can improve your chances of buying a home by having a pre-approval letter ready to present to the seller. Regardless, make sure you speak with a real estate professional before making or accepting any contingent offers if you’re buying or selling a home

Contingent Offers FAQs

What Is A Non-Contingent Offer?

Purchase proposals from buyers that do not include specific terms or actions that take place before the sale is final. This could include an appraisal, a home inspection, or financing approval. A non-contingent offer benefits the seller more than a contingent offer does.

What happens after the seller accepts a contingent offer?

Once the seller accepts the buyer’s contingency offer, they can remove their home from the market and hope the rest of the transaction goes smoothly. It’s possible for them to keep their options or offers open if they accept a contingent offer but want to keep their home on the market for other buyers.

In the event that buyers do not include a contingency clause, what happens?

You might be persuaded to put in an “open” offer on a house if the real estate market is strong enough. The absence of a contingency indicates that they have decided not to include one in the bidding process. To encourage the seller to choose their offer over others. A buyer may think that it is a good idea to remove any contingencies from their offer.

How often do contingent offers use to fall through?

The likelihood of a deal falling through is an important consideration for both buyers and sellers. The answer is that, in most cases, it doesn’t increase the likelihood of a deal falling through. While only 9 percent of all offers, including those without conditions failed, the National Association of REALTORS found that 76 percent of all offers contained a contingent.

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