The difference between contingent vs pending in real estate
We’re often asked what the difference is between pending and contingent. Quite simply, when a property is marked as pending, 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 listed 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.
3 common types of pending sales
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.
Pending – short sale
A short sale is when a home is being sold for less than the seller owes on their mortgage. 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.
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 contingent sales
If a buyer cannot get the home loan or mortgage they anticipated, the seller can opt out. Additionally, this can also protect the buyer in the event that they are unable to get approved for a loan.
The appraisal contingency says that a home must be appraised at the sale price or higher for a deal to continue. If an appraisal reveals that the home is worth less than the offer, the buyer can request a lower price or opt out.
A home inspection can involve many elements, which are usually structural or visual. If a home inspection reveals significant problems, the buyer can request sellers make repairs, provide the buyer compensation, or opt out all together.
The title contingency is important because if a title report reveals that there are liens or a conflicting ownership status, the buyer can opt out. This contingency grants the buyer the right to review a title report, which documents the home’s history of ownership.
Active – first right contingency
When you see a home listed as “Active – First Right,” this can mean the seller has a prior arrangement with a buyer who is given the opportunity to match any other offers that come in. If the buyer cannot match additional offers made on the home, the seller can opt out.
Active – kick out contingency
If a seller has found some 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.
What To Do if You Still Want to Bid?
If you really want to purchase a home that is contingent or pending, get in touch with your real estate agent immediately and follow the steps below to ensure your deal has the highest chances of going through.
Make sure you are going to look at any home you are interested in as soon as you can so that you are not putting in offers on homes that are contingent or pending. In hotter markets, you simply need to move quickly because there are more people bidding on homes. One way to search for homes is to use Trelora.com and save property searches. This way, once a search that meets your criteria comes onto the market, you’ll receive notifications immediately. It’s valuable for you and your agent to be attentive to new listings when demand is high and inventory is low because you can go look at the home quickly before other potential buyers even know it’s on the market! If you really love the property you can put an offer in before anyone else.
However, if you want to try your luck at getting a home that is contingent or pending, follow these steps below.
Have your agent speak with the listing agent
See if your real estate agent can speak to the listing agent to figure a few things out. See if your agent can find out the current status of the offer and what inspections have taken place? Maybe they can see what the buyer and seller are sensing with regards to the deal. Will the seller possibly entertain backup offers? These are all things an experienced real estate agent should be able to accomplish if you want to put an offer on a contingent or pending home.
Make a strong offer
Money talks! Make a stronger offer than your competition and see if the sellers are interested in taking yours.
Consider making an offer without contingencies
If you want to make a bolder move, make an offer that has no contingencies. Depending on the contract that they have entered, it may allow sellers to pressure their current buyer to possibly get rid of their contingencies or maybe leave the transaction all together. This would put your offer next in line if it’s attractive to the seller.
Write an offer letter
If this is the home you must have, then it never hurts to write a personal letter to the current homeowners stating why you love the home and what you plan to do with it. It’s impossible to know what the sellers are thinking and sometimes they simply want the next owner to love it as much as they did. Combining the emotional element of selling a home with a respectful offer can sometimes push a seller in your direction.
Looking to Buy or Sell a House?
Trelora real estate currently serves four markets: Colorado front range/Summit County, Seattle Washington metro area, Raleigh North Carolina metro area, and Phoenix Arizona metro area. Our mission is simple: full service real estate for a fraction of the cost. When you hire a traditional agent to help you buy or sell your home, you pay that agent 3-6% of the home’s value.
When you hire Trelora to sell your home, you pay one flat-fee to sell your home. When you buy a home with Trelora, we will split our commission with you. You’ll also get best-in-class customer service and a team of expert agents who close hundreds of deals per year using our proprietary technology.