What is a contingent offer in real estate? Maybe you've wondered how some people are able to buy a new house without having previously sold their current house.
Of course if you financially qualify to carry two separate mortgages, it makes the situation a bit more manageable. But for the rest of the population, timing moves to the forefront once again. If you don’t happen to qualify for two mortgages, you can always unload one along the way! For example you can make a contingent offer on your dream house stating that as long as you are able to sell your first property, you will financially qualify to buy the second. This falls under the mortgage approval contingency.
There are other types of contingencies in real estate that fall along these sames lines. For example we have home inspection contingencies, and appraisal contingencies. With home inspections, the buyer has an opportunity to have the home professionally inspected to determine what, if anything, needs to be fixed by the seller. If something is found to be wrong during this process, the buyer has the opportunity to back out of the sale.
Another contingency is for the appraisal usually ordered for the lender. This contingency has a qualified third party evaluate the property to determine the fair market value. If the appraisal is lower than the price offered, this contingency allows the buyer to back out of the deal.