What does the term "contingent offer" mean?

The term "contingent offer" refers to an offer in a real estate transaction that is dependent on certain conditions being met before the transaction can proceed. This means that the buyer's commitment to purchase the property is subject to specific criteria, such as obtaining financing, the successful completion of a home inspection, or the sale of the buyer's current home. If these conditions are not fulfilled, the buyer has the option to withdraw their offer without penalty. This type of offer provides both buyers and sellers with a structured way to ensure that critical aspects of the sale are addressed before finalizing the contract, which helps protect the interests of both parties involved in the real estate transaction.