Let's say you've found your dream home online, but the status is "active contingent." What does that mean, and is it still up for grabs? Does the "active" part of "active contingent" mean that the house can still be yours?
Read on for some explanation into this listing status and insight into making an offer.
What does active contingent mean?
If a home's status is "active contingent" it means that the buyer has submitted an offer with contingencies, or issues that must be resolved before the sale can be finalized. The most common contingencies are the home passing an inspection, the buyer getting approved for a mortgage, and the buyer being able to sell his old home. Once these contingencies are complete, the sale can move forward and the status will change to "pending."
What's the difference between active contingent and sale pending?
The biggest difference between these two listing statuses has to do with the presence of contingencies in the sale. If a house is "active contingent," some contingencies such as a home inspection must be met. But if a house is "pending," it means that no contingencies exist or they have all been met.
This, of course, leads us to the big question: Should you put in an offer on a home whose status is active contingent?
Putting in an offer on an active contingent listing
While it's important to not get your hopes up too high because an active contingent listing is, in fact, likely to sell, it doesn't mean you can't test the waters.
Brendan O'Donnell, a real estate agent with Center Coast Realty in Chicago, advises buyers to submit an offer, unless the seller's agent explicitly says they aren't showing the property anymore.
"If a seller knows they have an attractive back-up offer, they might be more willing to let that first deal fall by the wayside if something comes up during the contingency period and go with the second buyer," says O'Donnell.
The key, he says, is to make that back-up offer as attractive as possible.
“Submitting a fair price, waiving contingencies, agreeing to buy as is, and showcasing a solid, local lender go a long way in showing you are committed and are a worthy buyer,” he says.