Real estate transactions often come with a myriad of terms that can be confusing for both buyers and sellers, and one of the most important terms to grasp is "active contingent." This term plays a pivotal role in real estate contracts, especially during the negotiation and offer acceptance stages. Understanding what active contingent means can help you navigate property deals with confidence and clarity.

In simple terms, "active contingent" refers to a property that has received an offer from a buyer, but the sale is contingent upon certain conditions being met. These conditions could include the buyer securing financing, selling their current home, or completing a satisfactory home inspection. While the property is technically under contract, it remains listed as active on the market in case the contingencies aren’t fulfilled and the deal falls through.

For buyers, understanding the nuances of active contingent properties can open up opportunities to find your dream home, even if it's already under contract. For sellers, knowing how to handle contingencies is essential for ensuring a smooth transaction. Whether you’re new to real estate or looking to deepen your understanding, this comprehensive guide will unravel everything you need to know about active contingent listings.

What Does Active Contingent Mean?
How Does Active Contingent Impact Buyers and Sellers?
What Are Common Contingencies in Real Estate?
Can You Make an Offer on an Active Contingent Property?
How Long Does an Active Contingent Status Last?
Active Contingent vs. Pending: What's the Difference?
How to Navigate Active Contingent Properties as a Buyer?
Tips for Sellers Handling Active Contingencies
What Happens if Contingencies Aren’t Met?
Legal Aspects of Active Contingent Contracts
How to Properly List a Home as Active Contingent?
Can a Contingent Offer Become a Bidding War?
Real-Life Examples of Active Contingent Situations
Common Misconceptions About Active Contingent
How to Avoid Common Pitfalls in Active Contingent Deals?

What Does Active Contingent Mean?

Active contingent is a term used in real estate to describe a property that has an accepted offer but is still on the market because the sale is contingent upon certain conditions being met. These conditions are usually outlined in the purchase agreement and must be fulfilled for the transaction to proceed to closing.

How Does Active Contingent Impact Buyers and Sellers?

For buyers, an active contingent status means they may still have a chance to submit a backup offer. For sellers, it signifies that the deal isn’t finalized yet, and they must ensure the contingencies are met to avoid delays or cancellations.

What Are Common Contingencies in Real Estate?

Common contingencies include:

Home inspection contingency
Financing contingency
Appraisal contingency
Sale of the buyer’s current home

Can You Make an Offer on an Active Contingent Property?

Yes, in most cases, buyers can submit a backup offer on a property listed as active contingent. If the initial deal falls through, the seller may consider the backup offer.

How Long Does an Active Contingent Status Last?

The duration of an active contingent status depends on the timeframes outlined in the purchase agreement. Typically, contingencies must be met within 30 to 60 days.

Active Contingent vs. Pending: What's the Difference?

The main difference lies in the status of contingencies. Active contingent means conditions are still pending, while pending indicates that all contingencies have been met and the transaction is moving toward closing.

How to Navigate Active Contingent Properties as a Buyer?

Buyers should work closely with their real estate agent to monitor the status of active contingent properties and be prepared to act quickly should the property become available again.

Tips for Sellers Handling Active Contingencies

Sellers should:

Set realistic deadlines for contingencies
Communicate regularly with the buyer
Keep the property in good condition

What Happens if Contingencies Aren’t Met?

If contingencies aren’t met within the agreed timeframe, the contract may be terminated, and the property can return to the market as active.

Legal Aspects of Active Contingent Contracts

Active contingent contracts are legally binding agreements that outline the specific conditions that must be satisfied for the sale to proceed. Both parties must adhere to the terms to avoid legal disputes.

How to Properly List a Home as Active Contingent?

Sellers should work with their real estate agent to ensure the property is accurately listed as active contingent in the MLS, with clear information about the contingencies involved.

Can a Contingent Offer Become a Bidding War?

While rare, a contingent offer can lead to a bidding war if multiple backup offers are received. Sellers should weigh their options carefully before making a decision.

Real-Life Examples of Active Contingent Situations

Example 1: A buyer’s offer is accepted contingent upon selling their current home. If they fail to sell within the stipulated timeframe, the deal may fall through.

Example 2: A home inspection uncovers significant issues, and the buyer requests repairs. If the seller refuses, the contingency may not be satisfied.

Common Misconceptions About Active Contingent

Some people believe that active contingent properties are off-limits, but in reality, they are still open to backup offers. Additionally, sellers are not obligated to accept backup offers.