Contingent vs Under Contract: What’s the Difference?

Odds are if you’re in the market to buy a house you’ve seen the terms contingent and under contract. But how do you differentiate contingent vs under contract aside from simply reading what the sign or online real estate listing says? For homeowners selling their home, it’s valuable to understand the terms that apply to each stage of the sale process. And for home buyers, it’s important to know what your options, especially in a competitive market. 

This post breaks down the differences in contingent vs an under contract listing in the real estate market. So, you know how to make the best decisions in your home buying or selling journey. 

What is a Contingent Listing?

It’s easy to confuse the terms contingent vs under contract in real estate because the two terms have similar meanings. Contingent means that the given home is under contract, but there are still conditions, or contingencies, that need to be fulfilled before the sale is closed. 

This is why in some cases you’ll see a home listed as under contract and contingent. Meaning, the seller has accepted an offer, but the sale won’t be finalized until all the contingencies have been met. 

Both buyers and sellers can require contingencies. For example, the buyer can make an offer that is contingent on their primary residence selling prior to the purchase of the property listed. Another common contingency is the home inspection contingency clause. This contingency states that if the home does not pass inspection, then the buyer does not agree to purchase it. If the necessary contingencies are not met on either side, that party may be entitled to a refund of their earnest money. 

As a result, with most contingent listings there is still a chance the sale may not go through. This is welcome news to buyers in competitive markets, who could get a second chance at a home they love if the contingent contract falls through. 

Contingent vs Pending

After an offer has been made and the contingencies have all been met, the listing moves to pending status. This means the sale has not closed yet, but pending status means the real estate transaction is nearly complete. The amount of time a home spends in pending status can vary based on the paperwork needed for the transaction. Or the amount of time the agreed upon repairs take. 

What Does Under Contract Mean?

A home has a status of under contract when the seller has accepted a buyer’s offer. As we mentioned before, a home can be under contract and contingent at the same time, based on the contingencies listed in the contract by the buyer and the seller. 

Alternatively, a listing can also be considered non-contingent under contract. This means the buyer made the offer and did not include any contingencies. Essentially the buyer agrees to purchase the home for the offer price in as-is condition. When you see a home with a status of under contract based on a non contingent buyer, there is very little chance the sale won’t go through. Waiving contingencies means the buyer waives his or her ability to get out of the contract. 

Contingent vs Under Contract: Can I Make an Offer?

If you love a property, it doesn’t hurt to ask your agent to inquire with the listing agent its status. In some cases, sellers with a status of under contract may not be able to accept additional offers. But in most cases it’s possible. 

Many buyers choose to monitor a listing for change rather than make an offer if the home is already contingent or under contract. However, some sellers choose to include an addendum in the contract that allows a backup contract to go into effect if the “primary buyer” backs out or falls through. Thus, it may be a good idea to consider making a backup offer. 

A few different things are possible when the seller has a backup offer on their listing. If a backup offer is stronger than the original offer, the seller could be less open to negotiating repairs or other conditions with the primary buyer. As a result, this could increase the chances of termination of the primary contract. Alternatively, the listing already has a buyer, so the seller may not be interested in negotiating with a second buyer, especially if the offer is lower. It’s also important to note here that the seller has a contractual obligation to the primary buyer. 

The Bottom Line: Contingent vs Under Contract

Contingent and under contract are similar in meaning, and often used interchangeably. Thus if you’re in the market to buy a home, we recommend working with your agent to verify the status of any home you’re interested in. In today’s competitive market, it can be difficult to know where to start. 

Trelora has agents in 7 states across the country, with a team of expert agents ready to help you make a successful offer. We’ve provided top-notch customer service to over 7,000 families on the path to homeownership. The best part is, we split out buyer’s agent commission with you, up to $6,000 cash back to use in any way you’d like! Speak to one of our agents today to learn more.