When you’re searching online for homes for sale in Davenport, Fl, you will see many different terms specific to the real estate industry. While most people are familiar with a “home for sale” status, real estate terminology like “pending” and “contingent” can be confusing to first-time home buyers. It helps to get a better understanding of home buying terms so that you know how to best move forward when you find a home you want to buy in Davenport, Fl. Continue reading to learn more about what a contingency status on a home means and common contingencies sellers and buyers encounter on the housing market.
What Does Contingent Mean?
A common question when searching homes for sale in Davenport, Fl, is “what does contingent mean on a house?” Contingent is a type of status that signifies to buyers that the seller has accepted an offer from a potential buyer, though there are contingencies involved. A prospective buyer can submit an offer on a house that has certain contingencies or conditions that need to be met in order for the sale of the home to go through. States have varying laws about contingencies, so it is important to get a solid understanding of what is expected for buyers and sellers in the Florida real estate market.
Pending vs. Contingent in Real Estate
Pending and contingent statuses are used in real estate to signify that the seller has accepted an offer on a home. However, there are some key differences between a contingent status and a pending status. When a home status is contingent, that means that an offer is on the table but the home is still active on the market. A seller may choose to continue accepting other offers in case the offer with contingencies does not go through. A pending status, on the other hand, refers to a home that is no longer active and for sale. When a home is pending, there are only two steps remaining in the home buying process: the final paperwork and the closing. A home that is pending also signifies to potential buyers that they cannot place any additional offers on the home, while they can still continue to place an offer on a home that is contingent.
Common Contingencies with Home Buying
There are several common contingencies that a buyer or seller may include as part of the sale of a home. Here are four examples of common contingencies in the home buying process and what they mean for both the buyer and the seller:
An appraisal contingency will typically include a home appraisal so that the buyer can ensure that they are not overpaying for the home or property. If the home doesn’t have a recent appraisal, then the buyer may request an updated appraisal to compare with the listing price of the home. The buyer can also use an appraisal contingency to request a lower price for the sale of the home, and the seller can choose to pay the difference or walk away from the deal and consider other offers.
A financial contingency is common with buyers who are using some type of loan to help finance their home purchase. Because home buying loans are common for buyers, financial contingencies are also common. Once a buyer submits an offer on a home, there could be changes that affect their loan approval due to changes in circumstances like a change in employment or new debts.
Home Inspection Contingency
A home inspection contingency provides the buyer with time to discuss certain issues that need to be fixed after a home inspection. If the home inspection turns up issues with plumbing, electrical, or other concerns, the buyer can set a contingency that those be resolved before the sale can go through. The seller may also choose to lower the sale price or allow the buyer to step away from the deal.
A sale contingency allows a buyer time to sell their existing home to help finance the purchase of the new home. If the timing doesn’t work out perfectly and a prospective buyer finds a new home before they are able to sell their old home, then a sale contingency can help ensure the buyer is able to sell their home first.
When you are looking at homes for sale in Davenport, Fl, it helps to have a trusted real estate team by your side to navigate the home buying process. Choose Florida Realty Marketplace for local knowledge and expertise on the Davenport, Fl, housing market.