Home buying and selling involves an intricate lingo that may be confusing. Real estate agents frequently field inquiries from prospective buyers regarding the difference between contingent and pending statuses.
While contingent sales may still fall through, interested parties can still view the property. Learn the difference between contigent vs pending sales so that you know which homes to buy or sell.
1. Contingent Listings Have Contingencies
Home listings that are contingent indicate that an offer was presented and accepted by the seller; however, certain standard real estate contingencies must still be met before completion can take place – these could include financing arrangements, home inspection requirements or any number of provisions typically found within real estate contracts.
One of the most widely used home sale contingencies requires buyers to first sell their current house before making an offer on another one, protecting buyers in case they can’t sell in time or can’t afford two properties at once.
If you are considering buying a property with contingent terms, submitting a backup offer may be possible. When working with your broker and considering that 7% of contracts terminate or delay due to contingencies – it is wise to carefully weigh all aspects before making an offer.
2. Contingent Listings Have Backup Offers
When listing with contingencies and accepting backup offers, sellers hope that should the primary offer fall through, they have another buyer to step in and complete the sale. Barnes says his clients often use contingencies for home inspections and appraisals but have also seen them used when buyers’ home sales collapse.
Secondary buyers can take comfort in knowing that contingent listings can sometimes reach “pending status”, signifying all contingencies have been fulfilled or waived and there should be no reason for a sale to fall through. But even after meeting all requirements, deals may still fall through for any number of reasons.
Because of this, some buyers opt for backup offers on contingent properties with kick-out clauses allowing the sellers 72 hours to accept another better offer from someone else if the original buyer gets cold feet or can’t secure their mortgage. This provides secondary buyers with extra breathing room in case their original buyer changes their mind or can’t secure financing.
3. Contingent Listings Have Delays
Sometimes a buyer’s contract is contingent on them selling their previous home first; this can create a major roadblock to real estate transactions; if their previous home doesn’t sell within an acceptable timeframe, they may need to cancel this one as well.
As you search for your dream home, you may come across what seems like the ideal match: three bedrooms and two baths in an excellent school district and neighborhood – yet upon closer examination you notice it has a contingent sale clause marked “contingent.”
Are You Wondering If This Home Can Still Go Through the Sale Process If You Submit an Additional Offer? Real estate listings have four statuses – active, contingent, pending and sold. Here’s What Each Status Means:
4. Contingent Listings Have Rejections
Buyers searching for homes may notice listings marked contingent. This indicates that the seller has accepted your offer but is waiting on one or more contingencies being met before accepting your final bid.
Contingencies are intended to protect buyers against issues that could prevent them from closing a real estate deal, but if all requirements cannot be fulfilled it’s possible their deal could collapse and the property remain on the market.
In such an instance, sellers typically accept another offer from a buyer who can meet all contingencies and close on the property in time to avoid an extended vacancy on the market. While contingent sales don’t often collapse unexpectedly, homebuyers should focus on homes which have already accepted backup offers as back up plans should something arise that affects a contingent sale transaction.