The Biggest Difference Between A Contingent And Pending Home In Real Estate
If you're in the market for a new home or are selling yours, you might have come across the terms contingent and pending, referring to where the home is in the sale process. Like many of the real-estate expressions out there, it's important to know what these mean so you know what's going on. Vaguely speaking, contingency and pending homes are homes where the deal is in the process but hasn't yet been completed for one reason or another. These terms are often mixed up, but the main difference is that they happen at different stages in the process.
How conversant are you in real-estate speak? Some other real estate terms that homebuyers should get familiar with are those that give insight into the listing status and clarify the stage of the sale process. For example, a listing referred to as stale tells you that it has been on the market for a while, and the term close of escrow lets you know that the sale is being finalized.
A contingent offer is subject to pending requests
With a contingent offer, either the seller or the buyer can make some requests before deciding to move forward with the sale. Some examples of such stipulations are that the buyer is approved for financing, an inspection is carried out to show the property is in good condition, or an appraisal is carried out to confirm its value. When such conditions are put in place, the offer is then said to be contingent on those conditions being met. Seeing a lot of contingent listings while house shopping? This term can also provide some insight into the type of market you're dealing with. For instance, one of the cheapest places to buy a home in America right now is Cleveland, Ohio, and the market is so low-risk that some houses get contingent offers on the same day they are listed.
There are various levels to a contingent offer. A continue-to-show contingency (CCS) means that the seller can still list, show, and accept new offers on the property until the potential buyer has cleared up the outstanding issues. A no-show contingency, on the other hand, means the seller will stop showing the home as they wait for the buyer's final decision. The main takeaway with this type of offer is that the deal is still flexible at this point, and either party can still back out, so consider adding contingencies to your offer contract to make the process more predictable.
A pending offer is closer to the sale's finalization
When an offer is said to be pending, this means all conditions have been met, and there is an agreement to move forward with the sale. The seller and buyer are typically both satisfied at this point. However, it's important to note that the actual closing of the deal still depends on factors like those mentioned above. Similar to the contingency process, there are different stages of a pending offer. The seller might make the home a no-show or still be taking backup offers. In an odd case, it can automatically reappear on the multiple listing service (MLS) platform for agents and brokers to see.
Unlike a contingent offer, a pending offer is less flexible for either party to back out. When it's at this stage, the deal is very likely to go through. Are you a buyer looking for a home? Understanding these distinctions can help you make an informed decision. Notably, you're more likely to be successful with making an offer on a contingent house instead of a pending one.