When searching the market for a new home, you’ll run across properties in several states of activity. What do you do when the home you’re interested in is marked as “contingent” or “pending”? What does contingent mean in real estate? What does pending mean in real estate? Understanding the differences between contingent and pending can help you identify properties that you still might be able to buy, and also how to move forward if you’re interested.
What does contingent mean in real estate?
When a property is marked as contingent, an offer has been accepted by the seller. Contingent deals are still active listings 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.
What does pending mean in real estate?
When a property is marked as pending, an offer has been accepted by the seller and all contingencies have been satisfactorily addressed or waived. Pending deals are no longer considered active listings. A home will remain in the pending state until all legal work has been processed.
Common contingencies in real estate
Real estate contingencies can be based on a number of factors. Some of the more common contingencies when buying a house include:
Financial Contingency: If a buyer cannot get the home loan or mortgage they anticipated, the seller can opt-out.
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.
Inspection Contingency: If a home inspection reveals problems, the buyer can request repairs, compensation, or opt-out.
Title Contingency: If a title report reveals a conflicting ownership status, the buyer can opt-out.
Active - First Right: If the buyer cannot match additional offers made on the contingent house, the seller can opt-out.
Active - Kick Out: If the buyer cannot sell their current home in time to pay, the seller can opt-out.
Common pending types in real estate
There are a few different kinds of pending sales in real estate. The more common types include:
Pending - Taking Backups
The seller accepted an offer on their home, but something has hit a snag in the final stages; perhaps 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
The accepted offer is a short sale 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
The accepted offer has been pending for more than four months. This can be due to snagged negotiations, delayed construction, longer-than-usual processing time, or simply agent oversight in updating the listing status.
How often do contingent offers fall through?
While it’s hard to track how many contingent or pending offers fall through each year, research shows that around 4 percent of overall home sales fail. Meaning that the vast majority of sales do close, but deals can fall apart for many different reasons.
Can you make an offer on a contingent or pending home?
It is important to remember that you can make an offer on a home at any stage of the process, and this is why having the most up-to-date information and a real estate agent who knows how to handle complex deals is essential. If you’ve fallen in love with a home that is contingent or pending, you should get in touch with a Redfin real estate agent right away to explore your options for making an offer.
Ways to win a home before it goes contingent or pending
Make it a practice to see any home you’re interested in as soon as possible to avoid putting in offers on homes that are contingent or pending. One easy way to do this is to search for homes on Redfin, and then save the search so that you receive email updates when homes that match your criteria hit the market. If you really want to snag a home that’s listed as contingent or pending, you’ll need a well-informed strategy.
Have your agent speak with the listing agent
Find out the current state of the contracted offer — what inspections have taken place? How do the buyer and seller feel about the deal? Does the current contract entertain backup offers?
Consider making an offer without contingencies
Although this can be quite risky, waiving contingencies or making an offerwithout contingencies is attractive to sellers and, depending on the contract they have entered, may allow them to pressure their current buyer to also drop their contingencies or leave the negotiations altogether.
Write a personal letter
If there is a contingent house or pending house that you simply can’t miss out on, it doesn’t hurt to write a personal plea to the current homeowners. Regardless of the posted status or what the listing agent says, it’s not always possible to know the dynamics of a home sale. If the homeowners are unpleased with the negotiations, sending a compelling offer with an equally compelling letter may give you a leg up on the current buyers, as well as any future bidders.