While searching for a house in real estate, you’ll find yourself confused between various sales statuses, including contingent and pending. What is the difference between contingent vs pending? What does contingent/pending mean in real estate? Can I put an offer on a house that is contingent?
Of all the questions, the confusion between these sales statuses increased. So that is why I came up with this article to clear all your doubts. Here, I’ll give you the complete guide for contingent vs pending and what does contingent mean in real estate.
However, these sales statuses will indicate where the house stands in the sales process. Knowing the difference between contingent and pending will help you identify which property is available for purchase.
What Does Contingent Mean on a House or in Real Estate?
First, let me tell you the definition of the contingent in real estate. You may encounter this word while searching for a house in real estate.
A house listed as contingent means that the seller has accepted the offer, but some contingencies need to meet before the final sale.
Yeah, you need to meet some contingencies that are the clause in the sales contract, including home inspection, mortgage approval and appraisal. Remember that if a property listed as contingent, it does not mean that you can’t buy the property. However, the contingencies status of a property will depend on the laws of the state you’re living.
So, I’ll recommend you talk to your realtor to know about your state’s current rules for the contingent property.
Types of contingent statuses
You will find different types of contingent statuses in the actual state. However, each contingent status will come with various requirements and obligations. If you want to reach the closing process while purchasing a home, you must know what type of contingent status will help you.
Here, I’ll show you six types of contingent statuses in real estate.
1. Short Sale contingent
If a seller is eager to accept an amount less than the real estate’s house mortgage, the short sale contingency occurs. However, it will let you know that the home is no longer for sale. The reason behind this is that the offer got accepted by the seller.
As a result, it does not mean that the offer got approved.
2. Contingent Probate
A property listed as contingent probate after the death of the homeowner.
In this status, the lawyer will receive a vast portion of the amount to complete the process.
3. Contingent- Continue to show
A property listed as contingent continues to show when a seller accepted an offer, but multiple contingencies need to meet before closing.
In this, if you’re a buyer, you have to spend time completing these contingencies.
4. Contingent- Now show
A house listed as contingent now showed when a seller accepted an offer with all contingencies.
But remember that the seller will no longer accept the offers. Suppose you’re a buyer, and by chance, you address these contingencies, your property’s status will turn to pending.
5. Contingent- With Kick out
If a house is listed as contingent with Kick out, the buyer is given a deadline to meet his contingencies.
6. Contingent- With no kick out
On the other hand, if your property listed as contingent with no kick out, it means there is no deadline for a buyer to meet his contingencies.
What does Pending mean in real estate?
If the property is listed as pending, it means the offer got accepted and the requirements also met, but status changes from active to pending. Predominantly a home is listed as pending when only two final paperwork and closing steps are remaining after the offer is accepted.
However, it does not mean that the offer got approved or the sale is still active.
Types of pending statuses
Below, I’ll walk through three types of pending statuses in real estate.
1. Pending Short sale
A property listed as pending short sale means that the property will go through a sale process with the mortgage holder.
And better yet, the property will go further in the process and not accepting the backup offers.
2. Pending Taking backups
If a property is listed as pending taking backups, it means that the seller is showing the offers and still accepting the backup offers.
3. Pending- More than four months
Property is listed as pending for more than four months when an offer is pending for more than four months. It also indicates that the sale transaction is taking longer than its average time. One more thing, sometimes the listing agent forgot to switch the pending status after the closing process.
Difference Between Pending and Contingent
I hope your confusion between contingent vs pending must be clear out till now. However, after reading the definitions above in this article, we concluded that the home listed as contingent status is technically active. Moreover, the seller can receive other offers during this period. On the other hand, a home listed as pending status is no longer active.
Is it possible to make an offer on a contingent house?
As I mentioned earlier, a home listed as contingent is still active. So, we can say that you can make an offer on a contingent house. But you need to make sure that you meet all your contingencies to make this offer possible.
Let me explain to you with an example.
Suppose you’re looking to buy a contingent house, and your contingencies depend on selling your current home. And if you’re unable to sell your current home, the seller will start considering your other offers. On the other hand, if you can sell your current house, the listing status will change from contingent to pending.
Therefore, we can say that if you can’t clear your contingency, the seller will cancel the deal or will give you some time to remove the contingency.
The bottom line is that if you’re unable to purchase the home until you remove your contingency, the seller will forward to deal with another buyer.
Is it possible to make an offer on a pending house?
If you’re looking to purchase a home listed as pending, no legal reason can prevent you from making an offer on a pending house. However, it will depend on the listing agent whether he wants to make an offer or not.
So, in this case, we will recommend you to talk to your listing agent and convince him to make a deal.
How many times do contingent offers fall through?
According to the lender’s network, the average closing time for a new house in 46 days. However, multiple listing service does not provide any stats on how many contingents offers fall in the closing time of a house. There are many reasons why contingent offers fall through in the closing time of a house.
Below, we’ll show you some common contingencies that fall through while the closing process.
1. Home inspection contingency
Suppose you’re looking for a house, but you saw that it comes with several issues like plumbing, electricity, and structural problems during the home inspection. In that case, you have to put a contingency that the problems must get fixed. If the problems do not get resolved, you have the option to step back from the deal.
2. Appraisal contingency
Appraisal contingency will take place to ensure that you’re not overpaying for a house. If you’re looking to buy a house that does not appraise for the same amount the seller asking for, you can request the seller to lower the price.
3. Financial contingency
This contingency is familiar to many sellers because most buyers depend on a loan to finance their house. Many changes will happen when you make an offer on a house that is affected by not approval of a loan, such as changing or losing jobs.
4. Sale contingency
You can quickly sell your current house before buying the new one. But the timing and financing do not work perfectly. In that case, sale contingency will provide you with a certain amount of time to sell your current home to finance the new one.
What do you mean by it when a house goes from active to contingent?
I hope till now, you got the answer to your question about what does contingent means in real estate.
Now, we have another question for you guys what does it mean when a house goes from active to contingent. If the listing status of a property is active, the property will not receive any other accepted offers.
And when the listing status changes from contingent to active, it means the property is still technically active, and others can also make an offer on it. If you’re looking to buy a house with an active status and switch to contingent after a few weeks, you can still make an offer on it as a backup offer. However, remember that you can also remove the contingency to make an offer on a contingent house.
By chance, if you’re unable to remove the contingencies, we will recommend you move forward with the property.
Contingent vs Pending- Wrapping up
We hope the information provided in this article has clear out your confusion between contingent vs pending. Moreover, we also tried to answer your question about what does contingent means in real estate. The main difference between both listing statuses is that a house with contingent status will be technically active. And a property with pending status will be no longer active.