Contingent Homes Explained: Answers to Common Homebuyer Questions

House hunting can be exciting, but it also comes with a lot of confusing terms.

One of them is "contingent.”

You’re probably here to understand what this term really means and what it means for you as a homebuyer.

And you’reprobably also asking yourself if you can still make an offer, or if the house you want is already off the table when it is marked as contingent.

You came to the right place!

Many homebuyers have questions about what a contingent house means, how it affects their chances, and whether they should move on.

We’ll clear up all the confusion and help you understand contingent homes more.

Let’s get into it!

What Does it Mean if a Home is Contingent?

First things first - the basics.

When a home is marked as "contingent," it means the seller has accepted an offer but the sale hasn’t been finalized yet.

The deal depends on certain conditions, or contingencies, being met before everything is official.

Think of it like a “pending” sale with a few things to cleared.

These contingencies act as a protection for both homebuyer and seller to ensure that the deal only proceeds if certain things, like a satisfactory home inspection, a successful appraisal, or the buyer securing financing, are met.

Technically, the home remains active on the market, but the seller is legally bound to honour the original offer unless the agreed-upon terms are not satisfied.

If something falls through, like a home inspection uncovering major issues, the deal could be cancelled and the home may go back on the market.

What are the Common Types of Contingencies?

Not all contingent homes are the same.

While these may vary by agreement, some contingencies appear frequently in home sale contracts. Here are the most common ones.

1. Appraisal Contingency
Most lenders require an appraisal to ensure the home’s value matches with the loan amount.

If the appraisal falls short of the agreed-upon sale price, this contingency allows the buyer to renegotiate with the seller, cover the gap in cash or walk away. Sellers may lower the price to match the appraised value to keep the deal intact.


2. Home Sale Contingency
The homebuyer’s purchase depends on selling their current home first.

While this offers flexibility to buyers, sellers often view it as risky due to the uncertainty of timelines and market conditions.

If they can’t sell their house in time, they might back out of the deal, and the home could go back on the market.


3. Inspection Contingency
A home inspection can reveal hidden problems like structural damage or plumbing issues.

This contingency grants the buyer a set periodto hire a professional inspector to evaluate the home's condition.

If major issues come up, like structural damage or plumbing issues, the buyer can request repairs, a price reduction, or even withdraw their offer without penalty.

This contingency protects buyers from inheriting costly, unexpected problems and encourages transparency between both homebuyer and seller.


4. Mortgage (or Financing) Contingency
This is common for buyers relying on mortgages.

If the homebuyer’s mortgage application is denied (due to credit issues, income changes, or stricter lending criteria), they can exit the contract without losing their earnest money.

Sellers often favor offers with strong pre-approval letters to minimize their risk.


5. Seller Purchase Contingency
This contingency allows a seller to accept an offer on their home but makes the sale conditional on them finding a new home first.

Sellers use this contingency to avoid being left without a place to live, especially in competitive markets where inventory is low.

These contingencies often include a deadline (usually 30–60 days) for the seller to secure their new home. If they fail, the homebuyer can walk away or renegotiate.

6. Title Contingency
Before closing, a title company conducts a thorough search of public records to verify the seller’s legal right to transfer ownership.

If problems come up, like unpaid taxes or ownership disputes, the buyer can demand the seller resolve them or withdraw from the deal.

Can You Make an Offer on a Contingent Home?

Yes, you can make an offer on a contingent home.

BUT whether it will be accepted depends on the type of contingency in place and the seller’s willingness to consider backup offers.

If the first deal falls through, the seller can move forward with the backup offer instead of putting the home back on the market.

Do Contingency Rules Vary by State?

Yes, contingent home sales can vary by state due to differences in real estate laws, contract requirements, and market conditions.

Timelines for contingencies also differ across states. In hot real estate markets, sellers may be less willing to accept home sale contingencies because they have multiple offers to choose from. And in slower markets, sellers might be more open to contingencies if it means securing a committed homebuyer.

Because these rules and practices can vary, it’s always best for homebuyers, and even for sellers, to work with a local real estate agent who understands the specific contingency rules in their state.

What Happens if a Contingency Falls Through?

If a contingency isn’t met, the sale could fall apart or require renegotiation.

For example, if a financing contingency fails because the buyer’s loan is denied, they can back out without losing their money. Just like if a home inspection reveals major issues and the seller won’t make repairs, the buyer can walk away.

But sometimes deals can still move forward through negotiation. For example, if an appraisal comes in low, the buyer and seller might agree on a lower price instead of cancelling the contract.

Can Homebuyers Waive Contingencies?

Yes, homebuyers can waive contingencies, but it comes with risks.

Buyers sometimes choose to waive contingencies to make their offers more appealing to sellers especially in a competitive market.

For example, waiving a home inspection contingencymeans the buyer agrees to purchase the home as-is, even if major issues are later discovered.

While waiving contingencies can strengthen an offer, it removes important protection. For example,a homebuyer may have to cover the difference if the home appraises for less than the purchase price without an appraisal contingency.

But then again, waiving contingencies still vary by state due to differences in real estate laws. Some states have stricter protections in place for homebuyers, making it harder or riskier to waive certain contingencies, while others allow more flexibility.

5 Tips for Homebuyers Navigating Contingent Homes

Sometimes deals can fall through, giving other homebuyers a chance.

With the right strategy, you can stay prepared and improve your chances. Here are five tips to help you deal with a contingent home you’re interested in.


1. Understand the contingency
Some contingencies, like financing or inspection, have a higher chance of falling through, giving you an opportunity to step in.

Ask your real estate agent about the specifics to determine if the home is worth pursuing.

2. Submit a backup offer
If you’re really interested in a contingent home, submit a backup offer.

This puts you next in line if the current deal falls apart. Some sellers prefer backup offers to avoid re-listing their home, which can give you an edge.

3. Strengthen your backup offer
If you want to compete for a contingent home, make your offer irresistible.

A higher money deposit or fewer contingencies can make you a stronger candidate if the seller needs to choose a new buyer.


4. Stay flexible
Have a backup plan because a contingent home isn’t guaranteed.

Keep searching for other homes while staying in touch with your agent in case the contingent deal falls through.


5. Use a smart homebuying platform
With AI real estate platforms like WithJoy.AI, homebuyers can navigate contingent homes with ease while keeping 70% of the buyer’s agent commission—which can be up to $15,000 or more.

By leveraging AI and a streamlined homebuying process, you can stay ahead of the competition and save thousands in the process.

Make Contingent Homes Work for You

Being interested in a contingent home can feel uncertain.

Understanding contingencies, staying patient, and using smart strategies, you can increase your chances and secure the home you want.

Whether you'reactively competing or hoping for a deal to fall through, staying prepared will help you make a smart move.

And smart moves lead to great homes. Go get yours! 🏠 ✨