Contingent vs Pending Homes for Sale: What’s the Difference?
When searching for your new home online you may run across properties that are in different states of activity. The five most common types of statuses you’ll see are active, back-up, contingent, pending, and sold. Active and sold are straightforward. Active homes are still available while sold homes are no longer available.
However, what happens when you find a property that you’re interested in, but it’s marked “contingent,” “pending,” or “back-up”? What does this mean and can you still buy the property? First, let’s discuss what the difference is between contingent vs pending vs back-up.
What is Contingent vs Pending vs Back-Up?
What Is Contingent?
When a property is “contingent” it means the seller has accepted an offer, but the contract has contingencies that must be met. If all contingencies are cleared within the contracted due dates the property will be moved to pending status.
What Is Pending?
When a property is “pending” it means the seller has accepted an offer with no contingencies. The buyer has either satisfied all of their contingencies or has waived them. Once a property goes pending it usually means the deal is solid and both parties are waiting to close.
What Is Back-Up?
When a property is in “back-up” status it means the seller has accepted an offer, but is open to accepting a back-up offer. Sometimes it is because the deal in place is not solid or the seller simply wants a back-up in case the deal unexpectedly falls apart. Before you get too excited about a property in back-up status you will want to find out why the seller is open to taking back-ups and where they are in the process.
What's the difference between a contingent vs pending home sale? Our guide takes an in-depth look and discusses the major differences between a home that's contingent vs pending. #realestate #contingenciesCommon Contingencies
Inspection Contingency
The most common type of contingency is a home inspection contingency. Whether a buyer is obtaining financing or paying cash they will want to have a home inspection performed.
Depending on the contract terms the buyer may be able to cancel the contract if they do not like the results of the inspection report. They may also be able to negotiate a repair credit if unexpected items pop up but they are still interested in moving forward with the purchase.
Financing Contingency
A financing contingency means the contract is contingent on the buyer obtaining a loan. If the buyer is unable to obtain financing within the contingency period they can cancel the contract.
Appraisal Contingency
An appraisal contingency means the home must appraise for the contracted price. If the home appraises below the contract price within the contingency period the buyer can cancel the contract or attempt to renegotiate.
Title Contingency
Almost every contract will be contingent on the buyer receiving clear and marketable title. If title issues arise while under contract and cannot be cleared within the contingency period the buyer can cancel the contract.
Home Sale Contingency
It is rare, but some sellers will accept an offer with a home sale contingency. This means in order for the buyer to purchase the home the buyer has to sell their home first. If they are unable to sell their home they can cancel the contract.
Can You Make an Offer on a Home That Is Contingent or Pending?
Yes, you can typically make an offer on a home that is under contract. However, keep two things in mind. One, the seller may not be interested in accepting a back-up offer even if the home is in back-up status. Two, the seller may not allow showings. If you found a home that you are interested in but it is under contract contact us to discuss your options.
What's the difference between a contingent vs pending home sale? Our guide takes an in-depth look and discusses the major differences between a home that's contingent vs pending. #realestate #contingenciesHow to Avoid Missing Out on Your Dream Home
If you were too late and missed out on a contingent or pending property it is time to come up with a plan. Here are a few tips to make sure you do not miss out on another home.
Hire a Realtor
Sure you can search for property online by yourself, but real estate agents are often the first to know about new listings. They may even know about listings that are not on the market yet. Not only will they be able to notify you about brand new listings that fit your needs they will be able to guide you through the entire home buying process. Do not make one of the biggest home buying mistakes, hire a Realtor.
See New Listings Immediately
Even in a strong buyers market great homes sell fast. This is why it is important to see new listings immediately otherwise you may miss out.
Submit a Winning Offer
Once you find your dream home submit a strong offer. Limit the contingencies where appropriate, keep contingency periods tight but realistic, put meaningful money in escrow, and do not lowball the seller on price.
Do Not Wait to Write an Offer
You may have to look at a few homes before you find the one and you will know when you find it. Do not wait to submit an offer because you want to show your best friend or parents. If you decide to wait you could lose out to another buyer.
Final Thoughts
Searching for homes online is not always easy and it can be confusing. Not all real estate websites are updated regularly. When a new listing is entered into the MLS it may not be syndicated to third party sites for minutes, hours, or days.
Many websites also display all properties. This means you could be looking at homes that are contingent, pending, or already sold. When you are searching online make sure to check the property status. Even if you select “active” in your search the results may still show contingent and pending homes.
If you work with a top Realtor in your area you will be the first to know about new listings. You will not have to worry about looking at homes that are not available. However, homes do come back on the market, so do not completely rule out a contingent or pending home.
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What's the difference between a contingent vs pending home sale? Our guide takes an in-depth look and discusses the major differences between a home that's contingent vs pending. #realestate #contingenciesPopular Contingent vs Pending Home Sale Questions
How long does a house stay in contingent status? A home can stay in contingent status up until the day of closing. It depends on the contract contingency periods and the closing date. It is not uncommon for buyers to have a thirty day mortgage contingency and a thirty day closing, so in that instance the home would remain contingent until it sold.
How often do contingent offers fall through? While it is not common for contingent offers to fall through it does happen for various reasons. The property may not have appraised, there may have been a bad inspection, or the buyer was not able to obtain financing. Other reasons include title issues and liens.
How do pending vs contingent vs under contract differ? Under contract means a seller has accepted an offer and the property is under contract. Contingent means the buyer has contingencies that must be met in order to close. If they are unable to meet a contingency they can typically cancel the contract. Pending means there are no contingencies and the parties are moving toward closing.
About the Author
Top Wellington Realtor, Michelle Gibson, wrote: “Contingent vs Pending Home for Sale: What’s the Difference?”
Michelle has been specializing in residential real estate since 2001 throughout Wellington Florida and the surrounding area. Whether you are looking to buy, sell, or rent she will guide you through the entire real estate transaction. If you are ready to put Michelle’s knowledge and expertise to work for you call or e-mail her today.
Areas of service include Wellington, Lake Worth, Royal Palm Beach, Boynton Beach, West Palm Beach, Loxahatchee, Greenacres, and more.
Michelle Gibson of the Hansen Real Estate Group Inc. who has specialized in Wellington, Florida, real estate since 2001. She combines community knowledge with effective marketing, technology, and social media to help buyers, sellers, and renters throughout Wellington.