Contingent vs Pending Sales in Real Estate
We’re often asked what the difference is between pending and contingent. The answer is it’s a big difference. Quite simply, when a property is marked as contingent, an offer has been accepted by the seller. Contingent deals, on the other hand, are still active listings (which is why they are often called active contingent) because they are liable to fall out of contract if requested provisions are not met. If all goes well, contingent deals will advance to a pending state.
If a property is listing in pending status, it means that an offer has been accepted and any contingencies have been met. Homes in pending status are no longer considered active listings. … Short sales – A short sale is when a home is being sold for less than the seller owes on their mortgage.
There are 3 common types of pending sales you may encounter
1)Pending -Taking Backups. This means that the seller has accepted an offer on their home; however, they have hit a snag in the final stages. This could mean that there was an issue with a contingency on the offer. Now, the seller is taking backup offers in case their deal falls through.
2) Pending – Short Sale. In this situation, the seller 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.
3) Pending – More Than 4 Months. Occasionally an accepted offer will be pending for more than four months. This can be due to issues in negotiations, delayed construction, longer-than-usual processing time or simply agent oversight by the real estate agent in updating the listing status with the MLS.
A contingent sale can be tricky, but they’re manageable if handled well. As a real estate term, a contingent sale can sometimes mean that a buyer is unable to purchase a property without selling one they already own due to financing, or it could be based on other contingencies too. While it does add an extra risk, if researched appropriately, it can be a safe decision. Confer with your agent on what the contingencies are, the neighborhood it’s in, and the buyer’s agent’s specific pricing plan. Your agent will help guide you through the extra steps of the contingent sale and will bring you to a smooth closing.
6 Common Types of Contingencies
1) Financial Contingency- If a buyer cannot get the home loan or mortgage they anticipated, the seller can opt out
2) Appraisal Contingency – If an appraisal reveals that the home is worth less than the offer, the buyer can request a lower price or opt out.
3) Inspection Contingency- If a home inspection reveals problems, the buyer can request repairs, compensation, or opt out.
4) Title Contingency- If a title report reveals a conflicting ownership status, the buyer can opt out.
5) Active – First Right – If the buyer cannot match additional offers made on the home, the seller can opt out.
6) Active – Kick Out Contingency- If the buyer cannot sell their current home in time to pay, the seller can opt out.
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