What the Heck is the Difference Between “Contingent” and “Contract”?!

Here’s a two-part question one of my clients recently asked me… “Can you explain to me the difference between ‘CNTG/NO KO’, ‘CONT/KO’ and ‘CONTRACT’? Can you still put offers on houses like that?”

The abbreviations stand for the following:

• CNTG/NO KO means that the property is contingent upon one or more things, but the seller can not “kick out” the offer to take another offer. The type of “no kick out” contingency you usually see is an appraisal, financing and/or home inspection. Unless the buyer is paying all cash and has absolutely NO contingencies, the status is CNTG/NO KO
• CNTG/KO means that the contract is contingent upon one or more things, but the seller can “kick out” the offer to take another offer. The “kick out” usually involves some sort of notice and short time frame for the buyer to remove the “kick out” contingency or the seller can accept another offer. One example of a “kick out” contingency “Sale of Home Contingency” by the buyer
• CONTRACT means that all contingencies have been removed and the buyer and seller are locked into the contract. Typically, there is no way out of the contract that doesn’t involve default on the part of one or both parties.

As far as still being able to put an offer on a property in each of these three situations…

• CNTG/NO KO – you could put an offer on it if the seller is accepting back-up offers. Your offer would be considered only if the original buyer/contract falls through
• CNTG/KO – you can place an offer on it at any time. If the seller likes your offer better, they can give the original buyer notice requiring them to remove the “kick out” contingency. If the buyer does not comply with the terms of the notice and doesn’t remove the “kick out” contingency in time, the original contract could become void and the seller could accept your offer
• CONTRACT – at this stage of the game, the chance of the deal falling apart is extremely small. If you’re really interested in the property, have your Buyer’s Agent contact the Listing Agent and ask them to keep you in the loop should the contract fall apart. Your Buyer’s Agent and you can also place the property on your “watch list” which will alert you of any change to the status (aka from CONTRACT to ACTIVE/back on the market)

A few important things and disclaimers…

1) If you have questions about the status of a specific property or whether you are able to submit an offer on it, contact your Buyer’s Agent. If you don not have a Buyer’s Agent, contact me directly – danilo.bogdanovic (at) gmail (dot) com – 703.582.6900.

2) These abbreviations are used by the local MLS here in the DC metro area. Different real estate search sites and different MLS’ use different abbreviations/terms so none of this may apply to you/your area.

3) I am not a lawyer – this is not intended as legal advice nor guidance – every contract and its’ terms is different – every MLS and area is different – check with your Buyer’s Agent/Realtor and others for guidance.