Contingent refers to a deal with conditions yet to be met, while pending indicates a deal awaiting finalization or approval.
In the world of real estate, terms like “contingent” and “pending” are commonly used to describe the status of a property. But what exactly do these terms mean, and how do they differ? Understanding the difference between contingent and pending is crucial for both buyers and sellers. Let’s explore the meaning of each and their implications in real estate transactions.
Key Takeaways:
- Contingent status means the seller has accepted an offer, but certain conditions or contingencies still need to be met.
- Pending status indicates that all contingencies have been satisfied, and the sale is in the final stages of closing.
- Contingencies can include factors such as inspections, financing, appraisals, and more.
- It is possible to make an offer on both contingent and pending homes, but it depends on the specific circumstances and preferences of the seller.
- Working with a real estate agent and getting preapproved for a mortgage can increase your chances of success in both contingent and pending situations.
What Does Contingent Mean in Real Estate?
In real estate, when a property is labeled as contingent, it means the seller has agreed to an offer, but certain conditions must be met before the sale is final. These conditions, called contingencies, could include things like inspections, financing approval, or title searches. The seller keeps the listing active in case the buyer doesn’t meet these conditions, giving them a chance to accept other offers if needed.
For example, let’s say Jane is selling her house to John, who made an offer. Jane accepts, but the sale depends on John meeting certain conditions, like getting a loan and a home inspection. If John doesn’t meet these conditions, the deal might fall through, and Jane can consider offers from other buyers while keeping her house on the market.
Benefits of a Contingent Status
A contingent status offers several advantages for both sellers and buyers:
- Sellers have the opportunity to keep their options open and consider backup offers in case the primary offer falls through.
- Buyers have a chance to secure a property that they may have initially missed out on. If a buyer is patient and willing to wait, they might be able to take advantage of a second opportunity if the first offer falls through.
- Real estate agents can continue to promote the property and attract potential buyers, potentially leading to a more competitive bidding process and higher sale price.
It’s important to note that a contingent status is not the same as a pending status. While contingent properties require certain conditions to be met, pending properties have already met all the contingencies and are in the final stages of closing.
| Contingent Status | Pending Status |
|---|---|
| Conditions or contingencies need to be met | All contingencies have been met |
| Listing remains active | Listing is no longer active |
| Backup offers can be accepted | No backup offers can be accepted (in most cases) |
Common Types of Contingencies
Contingencies are an essential aspect of real estate transactions, providing protection for both buyers and sellers. Understanding the different types of contingencies can help ensure a smooth and secure transaction process. Here are some common contingencies in real estate:
Inspection Contingency
An inspection contingency allows the buyer to hire a professional inspector to assess the property’s condition. If significant issues or repairs are identified, the buyer can negotiate with the seller to address these concerns. If an agreement cannot be reached, the buyer has the option to back out of the sale.
Appraisal Contingency
An appraisal contingency ensures that the property’s appraised value meets or exceeds the agreed-upon purchase price. If the appraisal falls short, the buyer can negotiate with the seller to lower the price or choose to terminate the contract.
Financing Contingency
A financing contingency protects the buyer in case they are unable to secure a loan for the property. If the buyer’s mortgage application is denied or does not meet the agreed-upon terms, the buyer can opt-out of the sale without any financial penalties.
Title Contingency
A title contingency ensures that the property’s title is clear and transferable to the buyer. In this contingency, a title search is conducted to identify any liens, encumbrances, or ownership disputes. If any issues arise, the buyer has the right to cancel the sale.
Buyer’s Home Sale Contingency
A buyer’s home sale contingency allows the buyer to sell their current home before closing on the new property. This contingency provides flexibility for buyers who need to sell their existing property to secure the funds for the new purchase.
Having a clear understanding of these contingencies is crucial when navigating the real estate market, as they can significantly impact the outcome of a transaction. It is important for both buyers and sellers to work closely with their real estate agent and negotiate the terms of these contingencies to protect their interests.
Different Contingent Statuses
Within the contingent status, there are various subcategories that indicate different scenarios. These subcategories provide further information about the specific circumstances surrounding a contingent property.
Contingent Continue to Show (CCS)
This status means that the seller is still showing the property to potential buyers and may accept other offers, even though there is an accepted contingent offer on the table. The seller is keeping their options open in case a better offer comes along before the contingencies are met.
Contingent No Show
In this scenario, the seller has chosen to stop showing the property to new buyers. However, the seller remains confident that the contingency will be met and the sale will proceed as planned.
Contingent with or without a Kick-Out Clause
A contingent status can include a kick-out clause, which determines whether there is a specific deadline for meeting the contingencies or not. If a kick-out clause is present, the seller has the right to accept a better offer and terminate the previous contingent agreement if the original buyer is unable to meet the contingencies within the specified time frame.
Contingent Short Sale
A contingent short sale occurs when the seller agrees to sell the property for less than the remaining mortgage balance. This type of sale typically requires approval from the mortgage holder or lender.
Contingent Probate
In the case of contingent probate status, an estate is being sold due to the death of the homeowner, and the property has to go through the probate process. The sale is contingent on the completion of probate requirements.
| Contingent Status | Description |
|---|---|
| Contingent Continue to Show | The seller is still showing the property and may accept other offers, despite having an accepted contingent offer. |
| Contingent No Show | The seller has stopped showing the property but is confident that the contingency will be met. |
| Contingent with or without a Kick-Out Clause | Refers to whether there is a specific deadline for meeting contingencies or not. |
| Contingent Short Sale | The seller agrees to sell the property for less than the remaining mortgage balance. |
| Contingent Probate | An estate is being sold due to the death of the homeowner and has to go through the probate process. |
Understanding the different contingent statuses is crucial for buyers and sellers in the real estate market. It provides valuable insights into the specifics of each transaction and helps both parties navigate the complexities of the process.
What Does Pending Mean in Real Estate?
When a property is listed as pending in the real estate market, it indicates that all the contingencies have been met, and the sale is in the final stages of closing. While the transaction is nearing completion, the deal is not yet considered final.
There are different types of pending statuses that can provide additional insights into the progress of the sale:
- Pending Taking Backups: In this status, the seller is still accepting backup offers alongside the primary offer, ensuring a backup plan if the initial agreement falls through.
- Pending Short Sale: This indicates that the property is in the final stages of a short sale process. Short sales involve selling the property for less than the remaining mortgage balance, often requiring additional approvals and negotiations.
- Pending More than Four Months: This type of pending status suggests that the sale has been pending for an extended period, potentially signaling complications or challenges in completing the transaction.
To provide a visual representation, the following table outlines the different pending statuses:
| Pending Status | Description |
|---|---|
| Pending Taking Backups | The seller continues to accept backup offers alongside the primary offer. |
| Pending Short Sale | The property is in the final stages of a short sale process. |
| Pending More than Four Months | The sale has been pending for an extended period, potentially indicating complications in closing. |
Having a clear understanding of the pending status in real estate can help buyers, sellers, and real estate professionals make informed decisions throughout the transaction process.
Continue reading to learn more about the differences between contingent and pending in real estate.
Can You Make an Offer on a Contingent Home?
Yes, you can make an offer on a home that’s listed as contingent. Even though there’s already an accepted offer, sometimes deals fall through, giving you a chance to buy the house. Making an offer on a contingent home can be smart, as you might be next in line if the current deal doesn’t work out.
However, your offer needs to be really good to stand out. You might consider making a non-contingent offer, meaning you won’t have any conditions like selling your current home. Also, offering to pay in cash can make your offer more attractive to the seller because it’s faster and simpler. It’s helpful to work with a real estate agent who knows about contingent homes. They can help you make a strong offer and handle negotiations. Plus, getting preapproved for a mortgage shows the seller you’re serious about buying.
| Pros of Making an Offer on a Contingent Home | Cons of Making an Offer on a Contingent Home |
|---|---|
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Can You Make an Offer on a Pending Home?
When a home is labeled as pending, it means the sale process is almost finished. But can you still make an offer on a pending home? It varies. Some sellers might accept more offers if the first deal falls through or if they think they can get a better offer. Others might not want more offers once their home is pending.
To find out if you can make an offer on a pending home, talk to the seller’s agent. They’ll know if the seller is open to more offers. Remember, it’s up to the seller to decide whether to accept or reject offers on a pending home. If you want to make an offer, do it quickly and make it appealing, especially since other buyers might be interested too. A good real estate agent can help you through this process and improve your chances of getting the home.
| Pros of Making an Offer on a Pending Home | Cons of Making an Offer on a Pending Home |
|---|---|
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The Bottom Line
Understanding the difference between contingent and pending in real estate listings is essential for both buyers and sellers. Contingent homes have accepted offers but are still subject to specific conditions and contingencies. Pending homes, on the other hand, have met all the contingencies and are nearing the final stages of closing.
Making an offer on a contingent or pending home is possible, but it depends on the specific circumstances and preferences of the seller. It’s important to work with a real estate agent who can guide you through the process and help negotiate the best terms for your offer. Additionally, getting preapproved for a mortgage can strengthen your offer and show the seller that you are a serious buyer.
To better understand the difference between contingent and pending in real estate, let’s take a closer look at the key distinctions:
| Contingent | Pending |
|---|---|
| A property with a contingent status has accepted offers but is still subject to certain conditions or contingencies. | A property with a pending status has met all the contingencies and is moving towards the final stages of closing. |
| Contingencies can include factors such as inspections, financing, appraisals, and more. | All contingencies have been satisfied, and the sale is in progress. |
| Contingent homes may still be active on the market and can accept backup offers in case the current deal falls through. | Pending homes are typically not accepting any additional offers, but some may still consider backup offers. |
By understanding the differences between contingent and pending, you can make informed decisions when navigating the real estate market. Whether you’re a buyer or a seller, having a thorough understanding of these terms will help you navigate the complexities of the real estate transaction process and increase your chances of a successful sale or purchase.
Conclusion
Understanding the difference between contingent and pending in real estate is important for both buyers and sellers. Contingent means negotiations are still happening, and certain conditions need to be met before the sale can be final. Buyers can still make offers on contingent properties if they’re better than the existing one. Pending means the sale is almost done, with all conditions met. Buyers might find it harder to make offers on pending properties, as sellers may not accept more offers. To increase chances of buying a home, it’s good to work with a real estate agent and get preapproved for a mortgage.
FAQ
What Is the difference between contingent and pending in real estate?
When a property is listed as contingent, it means that the seller has accepted an offer but is keeping the listing active in case certain conditions or contingencies are not met. On the other hand, when a property is listed as pending, it means that all the contingencies have been met, and the sale is in progress.
What does contingent mean in real estate?
In real estate, a contingent status indicates that the seller has accepted an offer, but certain conditions or contingencies need to be met before the sale can be finalized.
What are some common types of contingencies in real estate?
Some common types of contingencies include inspection contingencies, appraisal contingencies, financing contingencies, title contingencies, and buyer’s home sale contingencies.
What are the different contingent statuses in real estate?
The different contingent statuses include contingent continue to show, contingent no show, contingent with or without a kick-out clause, contingent short sale, and contingent probate.
What does pending mean in real estate?
When a property is listed as pending, it means that all the contingencies have been met, and the sale is in the final stages of closing.
Can you make an offer on a contingent home?
Yes, it is possible to make an offer on a contingent home. The initial offer may have priority if all the contingencies are met, but making an offer can put you in line to purchase the property if the current deal falls through.
Can you make an offer on a pending home?
While a property is in pending status, it depends on the individual seller and their listing agent whether they will accept additional offers. Some sellers may still accept offers, while others may not be interested in receiving additional offers once the property is in pending status.
What is the difference between contingent and pending in real estate?
Understanding the difference between contingent and pending in real estate listings is crucial for both buyers and sellers. Contingent homes have accepted offers but are still subject to specific conditions and contingencies, while pending homes have met all the contingencies and are nearing the final stages of closing.
Source Links
- https://www.bankrate.com/real-estate/contingent-vs-pending/
- https://www.rocketmortgage.com/learn/contingent-vs-pending
- https://www.chase.com/personal/mortgage/education/buying-a-home/contingent-vs-pending
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