Contingent Vs. Pending: What’s The Difference? Home Buyers Guide

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There’s a very specific rhythm to the process of buying a home, especially once an offer is accepted. At that point, the home sale becomes either contingent or pending. Each status serves an important function, so home buyers should know the difference.

Contingency is the first stopping point once a home offer has been accepted. It means that the home sale is a go, as long as the conditions specified in the offer — like a successful home inspection and appraisal — are met. If they are, the home sale moves to pending status, which means that the deal appears poised for a successful close.

Pending vs Contingent

The difference between pending and contingent is that pending means the home is already under contract with a buyer and that all the terms were met, contract work completed, and the sale is being processed. Meanwhile, contingent means that the seller accepted the offer but the closing is still dependent on contingencies being met by the buyer.

Types of Contingency Status

Within contingency, which is essentially a holding period to allow a home sale to come together, there are several markers that real estate agents can use to indicate deal status.

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Contingent: Continue to Show

If a seller harbors any doubts about whether or not the home sale will go through, he or she may opt to keep buyers and potential offers coming in. The Contingent: Continue to Show, or CSS, status is used to invite those buyers and their agents to express an interest in the home.

Contingent: No Show

If a seller has more confidence about an accepted offer, he or she can choose to stop showings and prevent any further offers from being made.

Contingent: With / Without a Kick-Out Clause

The presence of a kick-out clause indicates that there’s a contingency deadline in place and the deal’s requirements must be met in a certain time frame. Likewise, the omission of a kick-out clause means that the contingency period is moving forward without a set timeline.

Short Sale Contingent

At times, a homeowner may decide to accept less for the home than the amount still owed on the mortgage. This is called a short sale, and it can be a months-long process. The short sale contingent status provides the space needed for the deal to close, signaling that the home is no longer up for sale but will need time to move off the market fully.

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Contingent Probate

When an estate is being sold following the death of its owner, it enters contingent probate status.

Types of Pending Status

At the next level of a home sale, the deal enters pending status, of which there are several types.

Pending: Taking Backups

Although a pending status is typically a sign of confidence as a deal moves toward closing, sellers can continue to invite new offers at this point. This status marker leaves room for further showings and offers.

Pending Short Sale

This is the next step in the short sale process and usually indicates that a short sale is on its way to going through. Chances are that the seller is not open to offers at this point.

Pending: More Than Four Months

Once a home sale has reflected a pending status for more than four months, it’s automatically flagged with “more than four months” status within the MLS system. This could reveal that the deal is taking longer than anticipated to reach its close, or that the listing agent neglected to mark it as “sold.”

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When a Home Sale Falls Through

Residential real estate transactions are often the biggest and most complex financial decisions that we make. There are many steps in the process and as a result, many opportunities for a home sale to get off-track or fail to close. When this happens, some possible reasons are:

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How To Help a Home Sale Move Forward

The more detailed a buyer’s offer is and the more thoroughly it is reviewed by the seller, the higher the chances of success are. Sellers can get a pre-inspection done, provide the appraiser with details about the home and refuse offers with contingencies in them if they prefer. Buyers can have lending pre-approval, financial documentation ready and a good sense of what they want and need in a home and knowledge of relevant property values.

Both parties should communicate as effectively as possible, think flexibly and stay nimble. Extensive documentation will be required to close the deal and there will be starts and stops along the way. Anticipate them and commit to doing your best at every step.

Good To Know

If you’re looking to buy a home, consider approaching your desired lender to request a pre-approval letter. The lender will check your credit score and other financial information relevant to the lending process and then provide a letter detailing your qualifications for the desired loan, including your pre-approval amount.

This can be a great reassurance for sellers and can help your offer stand out even more. You might also choose to write a brief profile of yourself and why you feel you are the right person to buy the home.

If you’re a seller, look for an organized buyer who has taken the time to secure pre-approval and share those details with you. Selling your home can feel like a very personal transaction, but in most cases, it happens between strangers. Finding the right buyer will provide peace of mind.

When Can You Make an Offer?

You can submit an offer at any point in the process of a home’s time on the market — right up until it’s marked as “sold.” Depending on where the home sits in the sale process, your offer may or may not earn consideration but you’re free to pursue it. If you find that you do gain traction with a backup offer, take a close look at the home to make sure another offer didn’t fall through for reasons tied to the quality of the home.