Active contingent a.k.a active with contingencies is a type of sale status that means that the seller has accepted an offer from a buyer. However, some conditions must be met before the sale is finalized.
When buying a house, it is important to do the house inspection before finalizing a deal. In this case, you can still make an offer and include the house inspection in your contingencies. This smart move will give you a chance to see major repairs or renovations that must be discussed in the deal.
Related article: 7 Reasons You Should Get A House Inspection
Examples of Active contingent
If you see that the house you are about to buy has structural problems; you can renegotiate the price of the property or have the seller fix these problems before you pay for the house. You must include the house inspection in your contingency agreement. If the offer you made was subjected to these contingencies, the seller will update the house status as active contingent.
There are also times when a buyer submits an offer before they secure a mortgage. In this case, the seller will still accept your offer on conditions that you can finance the house. For this reason, you need proof that you have the money necessary to buy the house before the deal is finalized. If you do not get approved for the mortgage, the seller will sell the house to other buyers.
Another common example of an active contingent is when buyers submit offers to buy houses before they sell the ones they are living in. This happens when buyers want to finance their new home with their current one. For this reason, selling the current home will be contingent and the sale will not go through if the buyer’s current home is not sold. This way buyers can walk away from the deal without financial or legal problems if their homes are not sold.
Although there is no guarantee that the deal will go through; sellers accept these offers since it is better to have an offer regardless of how strict it is. In the end, the seller can still put the house on the market, if the prospective buyer fails to close the deal.
