Contingent vs Pending: What This Means in Real Estate

Table Of Content

• What Is An Escalation Clause And When Is The Time To Use One?
• buying a homeBuyer’s market vs. seller’s market in real estate, explained
• Selling a House With No Contingencies
• Homeowners Insurance Contingency
• What Does Contingent Mean in Real Estate?
• The 5 Best Places to Live in Arizona in Today’s Housing Market

According to data from the January 2022 REALTORS® Confidence Index Survey, 23% of all purchase contracts are delayed, and 7% are terminated entirely. Those figures include both pending and contingent listings, though most issues that delay or end a contract are thanks to contingencies. A property listed as “contingent” in real estate means the seller has accepted an offer, but the deal isn’t fully closed yet. The final sale hangs in the balance, waiting for certain conditions or “contingencies” to be met.

What Is An Escalation Clause And When Is The Time To Use One?

Lenders require an appraisal to confirm the value of your would-be home so they don’t lend you more than the property is worth. With this contingency, if the appraisal comes in lower than the purchase price, you can renegotiate or walk away from the contract. Now that you understand common contingencies, you’ll be better prepared when you come across an active listing that you want to make an offer on while house shopping.

buying a homeBuyer’s market vs. seller’s market in real estate, explained

If you’re working with a real estate agent, it’s likely you’ll be primarily focusing on homes listed with agents. The multiple listing service (MLS) is a database where real estate agents and REALTORS® can access homes that are listed with other agents. If your contingent purchase offer falls through, you’ll get a refund of your earnest money deposit if you or the seller are pulling out for a reason specified in the purchase and sale agreement. The seller will be free to accept a backup offer or put the home back on the market. A June 2023 study from the National Association of REALTORS® found that about 5% of all purchase agreements fall through, so a majority of contingent offers will make it to pending and closing stages.

Selling a House With No Contingencies

In this post, we’ll review how you can still throw your hat in the ring for a house that’s caught your eye, even if it’s currently under a contingent status. We’ll also look at how to decide if it’s worth your time to make the offer, and what you can expect if you do. On the other hand, sellers may accept a contingency with a no-kick-out provision in a buyer’s market, which would prevent them from accepting new offers while the contingencies are worked through.

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Homeowners Insurance Contingency

It might last for a few days to a few weeks or even longer, depending on how quickly the buyer and seller can fulfill the conditions outlined in the contract. In general, contingent means “depending on certain circumstances.” In the world of real estate transactions, it means the sale depends on the contract’s contingencies being met. A contingent listing is one where the seller has accepted an offer, but is opting to keep the listing active while they make sure all conditions are properly met. A contingent house listing means that an offer on a new home has been made, the seller has accepted it and the home is now under contract. These contingencies are clauses in the sales contract, which can include matters that deal with a home appraisal, home inspection or mortgage approval.

Buying Options

Buying and selling a home often requires a dictionary as you navigate a new litany of terms, each describing a crucial step in the process. In real estate, a contingent offer has a meaning all its own—one that can make or break a deal. HomeLight-recommended real estate agents are top-tier negotiators who understand the market data that helps you save as much as possible when buying your dream home. Buyers often want a home inspection to protect their interest — they want to lift the hood of the car so to speak before they commit to buying. Buyers can also use the home inspection report as leverage to negotiate a better deal, asking you to complete repairs or offer repair credits. If you refuse and you can’t come to an agreement, they’re free to walk away.

What Does Contingent Mean in Real Estate?

The sale should close, and your best bet is to find another property to purchase. If this home is particularly desirable to you, however, it doesn’t hurt to contact the seller’s agent and let them know you’re interested—just in case the deal falls through at the last minute. The listing may even say “pending – taking backups” if this possibility exists.

Common Contingent Statuses

Do your research ahead of time and talk to your real estate agent to get a sense of the information and materials needed for making an offer on a home with an active contingent status. “Sellers are typically forced to accept some level of contingencies,” Kenin says. “It is rare to find a buyer who will blindly take on a home and who has cash to cover the entire purchase price.”Just because a home has a contingent offer in place doesn’t mean it’s off the market.

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You might see this on foreclosed properties since banks and lenders are the ones handling the direct sale of the property. We analyze millions of home sales to find real estate agents that sell homes faster and for more money. It takes just two minutes to match you with your personalized recommendations. Usually, you’re required to provide the buyer with 24, 48, or 72 hours notice to give them a final opportunity to remove their contingency and close. If the current buyer is unable to lift their contingency in time, you can terminate the agreement, return their earnest money, and start negotiations with the next buyer.

Choose from business checking, business credit cards, merchant services or visit our business resource center. These offers are a good way for sellers to maintain interest in their homes while a deal is sorted out. Most contingent offers involve finding financing for the home, but there are other reasons.

Most home buyers finance their property purchase, and mortgage approval isn’t finalized until a few days before closing day. This mortgage contingency is a safety net in case a lender doesn’t approve the final mortgage, at which point the buyer can back out of the deal without major penalties. Appraisal contingencies mean a bank or financial institution has to agree on the value of a home.

If a contingency isn’t met by 30 to 90 days, the home may become available. It’s still on the market until closing, but the buyer and seller have agreed not to show it. The average length of a home sale contingency offer is 30 to 90 days.

Seeing a pending or contingent status on a home you love can be disheartening, but it doesn’t mean you’re without options. Contingent listings will often allow backup offers, though it’s unlikely you’ll be able to bid on a home that’s pending. Work with your agent to determine the best course of action for your unique situation. When a home is pending, the seller has accepted an offer and all conditions have been met for the sale to close. The buyer has fulfilled their contingencies or waived them all together.