WHAT DOES CONTINGENT MEAN IN REAL ESTATE?

DIFFERENCE BETWEEN CONTINGENT AND PENDING SALE, AND WHEN YOU CAN STILL PUT IN AN OFFER

If you’re buying a home there are tons of terms thrown around, including contingent and pending. Here’s what you should know about these terms.

Contingent vs. Pending Sales

A pending sale means that an offer has been accepted and contingencies have been met. These listings are also no longer considered active.

A contingent sale means that a buyer must accomplish something before they’re able to buy a property. There are often multiple contingencies for a single property, so you’ll need to talk to your agent about how to deal with them.

Types of Pending Sales

Taking Backups: The seller has accepted an offer, but there’s something wrong with it—often, the issue is that a contingency hasn’t been met. Because of that, the seller is now taking backup offers just in case the first offer falls through.

Short Sale: This means a property is being sold for less than the seller owes their mortgage lender. As Trelora says, “the seller [has] accepted an offer on a short sale property and must be approved by additional lenders or banks outside of the buyer or seller’s control, which may take a long period of time to process.”

More than 4 Months: Sometimes accepted offers will sit in limbo for more than four months, which is considered a kind of cut-off between active and pending. Issues like delayed construction projects can put listings in limbo.

Types of Contingent Sales

Financial: If the buyer cannot get the home loan they anticipated or communicated with the seller, the seller can “opt out.”

Appraisal: The home must be appraised at the sale price or higher for the process to continue.

Inspection: If, after a home inspection, the property turns out to have major issues, the buyer can ask the seller to make repairs or provide compensation. The seller can also decide to cancel the deal.

Title: If a title report reveals that there are liens on the property or conflicting ownership, the buyer can opt out.

Active – First Right: The seller has a current deal with a buyer who is given the opportunity to attempt to match any other offers that come through.

Active – Kick Out: Trelora explains, “If a seller has found buyers, but they need to sell their current home before they can make an offer, this allows the seller to continue to keep the home for sale on the market. If the buyer cannot sell their current home in time to pay, the seller can opt out.”

Want to Bid on a Pending or Contingent Property?

We don’t blame you. Occasionally, our clients fall in love with a property that’s already been spoken for.

Talk to your agent. They may get lucky by working their magic—they might talk with the listing agent, encourage you to make a strong offer, or even make an offer without contingencies.

The easiest way to make sure you’re only bidding on active properties (and to save yourself a lot of stress and heartache) is to keep your eyes peeled and move quickly on properties you’re interested in as they hit the market.

Our website allows you to set custom search parameters like location, property type, price, and square feet and then request email updates so you know right when new listings are live. You’ll only be notified about properties that fit your search parameters. Get email alerts now!

Have questions about what contingent and pending means in real estate or bidding on tricky properties? Give us a call at (608) 957-2683!