What is a contingent offer in real estate?

A contingent offer in real estate refers to an offer that includes specific conditions that must be satisfied before the transaction can be finalized. This means that the prospective buyer is willing to purchase the property, but not without fulfilling certain requirements first. Examples of these conditions could include securing mortgage financing, completing a satisfactory home inspection, or the sale of the buyer's existing property.

When these contingencies are outlined in the offer, they protect the buyer by ensuring they are not fully committed to the purchase until they are comfortable with the circumstances. If the conditions are not met within a specified time frame, the buyer typically has the option to withdraw their offer without facing penalties.

The other options do not accurately capture the essence of a contingent offer. An unconditional offer means the buyer is ready to proceed without any conditions or requirements, which is the opposite of a contingent offer. An agreement between real estate agents pertains to professional relationships and transactions that may involve cooperation or compensation between them, rather than buyer-seller dynamics. Lastly, a binding agreement refers to contracts that are firm and enforceable, but contingent offers inherently include terms that allow for changes based on the fulfillment of conditions, making them flexible rather than completely binding.