If you’re house hunting on Zillow, you may have noticed some listings are marked as “Active with Contingency.” This term can be a little confusing, but understanding it is important when you’re trying to buy or sell a home. In this article, we’ll explain what it really means, how it impacts buyers and sellers, and what you can do if you find a home with this status.
What Are Contingencies in Real Estate?
First things first, let’s talk about contingencies. In simple terms, a contingency is a condition or requirement in a real estate deal that must be met before the transaction can move forward.
For example, a buyer might make an offer on a home with the condition that it passes a home inspection, or that they can secure financing. If the condition isn’t met—say, the inspection reveals major issues or the buyer can’t get a loan—the buyer has the option to back out without penalty. Contingencies are there to protect both parties, ensuring everyone is on the same page before the deal is finalized.
What Does “Active with Contingency” Mean?
When you see a listing that says “Active with Contingency,” it means the seller has accepted an offer from a buyer, but that offer is still subject to certain conditions being met. These conditions (or contingencies) could involve things like:
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Home inspection: The buyer wants the house to be inspected, and if there are problems, they might renegotiate or back out.
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Appraisal: The buyer needs the house to appraise for the sale price. If it doesn’t, they could ask for a price reduction or cancel the offer.
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Financing: If the buyer can’t secure a mortgage, they may be able to back out of the deal.
In other words, the deal isn’t finalized yet. The property is still technically “active,” and the seller could consider other offers if the contingencies aren’t met.
What Does It Mean for Buyers?
As a buyer, seeing a home marked “Active with Contingency” means the property isn’t officially off the market yet, and you may still have a shot at it.
Can I Make an Offer?
Yes, you can still make an offer on the property. If the current buyer’s deal doesn’t work out—whether the contingencies aren’t met or something else goes wrong—the seller could move on to your offer. It’s called a backup offer, and it’s a good way to stay in the running for the home.
Should I Act Quickly?
If you’re really interested in the home, it’s a good idea to act quickly. Even though the deal is contingent, things can change fast in real estate. The more you stay on top of the situation and communicate with the seller’s agent, the better your chances of stepping in if the original deal falls apart.
Are the Contingencies Likely to Be Met?
It’s also important to consider how likely the contingencies are to be met. If the buyer is having trouble securing financing or the inspection report is concerning, there’s a chance the deal could fall through. Keep an eye on the situation, and don’t be afraid to check in with the listing agent.
What Does It Mean for Sellers?
If you’re a seller, accepting an offer with contingencies means you’ve found a potential buyer, but the sale isn’t guaranteed just yet.
What Should I Expect?
You may be dealing with delays while the contingencies are worked through. For example, the buyer might need time to get financing, or there could be back-and-forth over repairs after a home inspection. These delays can be frustrating, especially if you’re hoping to close quickly.
Can I Accept Another Offer?
Yes, you can keep the listing “Active with Contingency” and accept backup offers. In fact, it’s a good idea to do so. If the current offer falls through because the contingencies aren’t met, you’ll have a backup plan in place.
What Happens if the Contingencies Aren’t Met?
If the buyer can’t meet the contingencies, the sale will fall through, and you’ll be back to square one. The property could go back on the market, and you can start entertaining new offers. This is why many sellers prefer to keep their listing active rather than marking it as “Pending” right away.
Should I Be Concerned About “Active with Contingency” Listings?
Whether you’re buying or selling, “Active with Contingency” listings should not be cause for concern, but they do mean there’s still some uncertainty in the deal. Here’s how to handle it:
For Buyers
If you’re serious about a home that’s “Active with Contingency,” be proactive. Make a backup offer and keep in touch with the seller’s agent for updates. If the deal falls apart, you might get a chance to move forward.
For Sellers
If you’re the seller, it’s a good idea to stay flexible. While you wait for the contingencies to be satisfied, keep other options in the pipeline. This way, you’re not caught off guard if the deal falls through.
Key Takeaways
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“Active with Contingency” means the seller has accepted an offer, but the sale isn’t final until certain conditions are met.
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Common contingencies include home inspections, financing, and appraisals.
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As a buyer, you can still make a backup offer if the current deal doesn’t go through.
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As a seller, you can keep your listing active and entertain other offers while contingencies are being worked out.
Need Help Navigating the Real Estate Market? Let Red Door Metro Help
Whether you’re buying or selling, the real estate process can feel overwhelming, especially when you’re dealing with contingencies. That’s where Red Door Metro comes in.
Red Door Metro is a team of experienced Realtors who specialize in helping clients navigate the local Washington, D.C. metro area market. We can guide you through the intricacies of contingencies, help you craft strong offers, and ensure your real estate transaction goes smoothly.
If you’re looking to buy or sell in the DC Metro area, get in touch with us today at Red Door Metro. Our team is ready to help you make your next move with confidence!
FAQs
1. What Does “Active with Contingency” Mean on Zillow?
Answer: “Active with Contingency” means that a seller has accepted an offer from a buyer, but the deal is still dependent on certain conditions being met (such as a home inspection, appraisal, or financing approval). The property is still technically on the market, and other buyers may submit backup offers if the contingencies aren’t met.
2. Can I Make an Offer on a Property Marked “Active with Contingency”?
Answer: Yes! Even if the home has an accepted offer, you can still make a backup offer. If the current buyer’s deal falls through because the contingencies aren’t satisfied, the seller could move forward with your offer.
3. How Long Will It Take for the Deal to Be Finalized if It’s “Active with Contingency”?
Answer: The timeline varies depending on the type of contingency. For example, home inspections usually take a few days, while financing approval could take several weeks. However, if all contingencies are met, the deal may proceed smoothly to closing.
4. What Happens if the Contingencies Are Not Met?
Answer: If the contingencies are not satisfied (such as issues arising during a home inspection or the buyer failing to secure financing), the sale can fall through. The property may then return to the market for other buyers to consider.
5. Should I Be Concerned About Buying a Property Marked “Active with Contingency”?
Answer: Not necessarily. While there is some uncertainty, it simply means that the buyer has made an offer but is still waiting on certain conditions to be fulfilled. It’s an opportunity for you to make a backup offer in case the first buyer’s deal falls apart.
6. Can the Seller Accept Another Offer While the Property Is “Active with Contingency”?
Answer: Yes, the seller can keep the listing “Active with Contingency” and entertain backup offers. If the initial offer falls through due to unmet contingencies, the seller can proceed with the next best offer.
7. How Do Contingencies Affect the Homebuying Process?
Answer: Contingencies give the buyer protection, ensuring they’re not locked into a deal if certain conditions are not met (such as financing or a satisfactory home inspection). However, they can also delay the closing process and potentially cause a sale to fall through.
8. Can a Buyer Back Out of a Deal After the Seller Accepts an Offer “Active with Contingency”?
Answer: Yes, the buyer can back out of the deal if the conditions specified in the contingencies (such as a failed home inspection or financing issues) aren’t met. This allows the buyer to walk away without penalties.