When searching for property for sale on Hilton Head Island or in Bluffton, you may come across properties listed as “Contingent”. When a property is reported as contingent, it simply means that a buyer and seller have agreed on the major terms, usually price, closing date, etc., but other details must be met in a satisfactory manner such as a short sale approval, inspection, appraisal or mortgage commitment.
For example, a buyer has agreed to purchase a home for a certain amount of money in a certain time frame and the seller has agreed to the buyer’s proposal. All of these decisions are done in writing and escrow is opened for the property and parties involved. During this period, the buyer has agreed to a specific amount of time to do their due diligence including home inspections, appraisals, financing, etc. Once the contingencies have been met and removed, the buyer will move forward with the purchase or remove themselves from the contract. If the buyer chooses to continue in escrow and purchase the property, the property status will change to “Pending”. If the buyer chooses to remove themselves from the contract, the property is usually returned to the market as “Active”.
Another common contingency is short sale or foreclosure approval on the seller’s side. At this point, the sale price, closing date and other major terms have been agreed upon by both the buyer and seller. Consideration or earnest money has been put down on this property. The property is placed “Contingent”, awaiting approval from the seller’s bank or financial institution. This time frame may be long especially if the property is a short sale.
When you come across these properties during your real estate search, it is best to contact a Realtor regarding the status of this property. It may be possible to view and submit a back-up offer on the property. In the case of a short sale or foreclosure, most banks or financial institutions will consider and see through one contract at a time. So submitting a back-up offer may be a waste of time and cause you to lose another property that better suits your needs.