Question 1

What is a contingency?

Accepted Answer

A contingency is a clause in a real estate contract that requires something to occur by a set date before the sale can proceed. If a contingency isn't met before that date, the buyer can ditch the sale without losing earnest money. Learn more about contingencies in real estate contracts.

Question 2

How long does a house stay in contingent status?

Accepted Answer

A home is contingent when an offer has been accepted but there are still contractual contingencies in place. The longest contingency period is typically the loan contingency, which can last from 20-60 days. Learn more about loan contingencies.

Question 3

How often do contingent offers fall through?

Accepted Answer

Contingent offers have a greater likelihood of falling through than non-contingent offers because they rely on additional measures, like the buyer finding financing. Sellers usually prefer offers with few or no contingencies. Learn more about contingency removal.

Question 4

Can a home seller sue a buyer for backing out?

Accepted Answer

A buyer can back out of a contingent offer without penalty if those contingencies aren't met. But if the buyer backs out of a deal and does not have the right contingencies in place, they’ll forfeit the earnest money deposit to the seller. The seller may also be able to sue them for additional damages in some instances. Learn more about common real estate contingencies.

Question 5

Can a buyer back out of an accepted offer on a house?

Accepted Answer

Buyers can back out of an offer without losing their earnest money if they have the right contingencies in place. If a buyer makes a non-contingent offer, or backs out of a deal even though contingencies were met, they will lose their earnest money. They may also find themselves in legal trouble with the seller. Learn more about real estate contingencies.

Question 6

What is a loan contingency?

Accepted Answer

A loan contingency (also known as a mortgage contingency or financing contingency) protects the buyer from having to purchase a house if they can't find financing. If the buyer removes the loan contingency but they can't find financing and want to back out of the deal, they will lose their earnest money. Learn more about loan contingency removal.

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Home Bay

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