Keeping Those Home Fires Burning: House Hunt

This week's "decipher the real estate term" is contingency.

The traditional meaning is when a buyer goes out looking for a new home and makes an offer on one, but still owns his current home. So he makes a contingent offer: he will buy the new home if he can sell the one he's already got.

The seller can accept his offer, but is also free to entertain other offers from buyers who don't have contingencies. It's kind of like accepting a date with your best friend's out-of-state cousin on Valentine's Day, but being able to break it off if the cute firefighter asks you out instead.

A newer meaning in this topsy-turvy real estate market

If you make an offer on a home that the owner wants the bank to accept as a short sale, then he will put you on contingency while he tells the bank about this serious buyer (that's you) and tries to talk it into accepting a lower offer (one in which the bank gets less than it is owed). So everyone sits around and waits until the bank makes up its mind.

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In either case, it can be like a house of cards where every player's position affects all the others. It can be frustrating and time-consuming, but that's the sad new reality during these economic times.

Long story short? If you're a first-time buyer, or one who doesn't have a specific deadline, you are golden! Don't let anyone push you around, because you are a rare and prized commodity in the real estate market right now.

Here's more about contingency sales:

• Contingent Contracts for Selling Buyer's Home
• The Home Sale Contingency Catch