Contingent vs. pending—what’s the difference?

If a property is listed as contingent, that means an offer on a home has been made to the seller that was accepted. However, the listing is still considered active until all obligations of the contract have been met. 

Once everything is in place—meaning the seller has accepted the offer and all contract requirements have been met by the home buyer—then the property is reclassified as “pending.” With the listing as pending, the property is no longer marked as active for other buyers, yet it will stay in pending sale mode until all of the legal aspects of the deal have concluded between buyers and sellers.

What can hold up a property sale once an offer has been accepted? Roadblocks vary but these are some of the most common contingent statuses:

• Appraisal contingency. The buyers discover that the home is not worth as much as their offer once they’ve had it appraised.

• Home inspection contingency. The buyers discover that upon property inspection there are additional repairs that they didn’t anticipate. 

• Title contingency. Indicates that there is a discrepancy about who actually owns the property.

• Home sale contingency. The purchase of a property is contingent on the sale of the buyer’s current home. If the buyer can’t sell the house they currently live within a specified period of time, they can terminate the contract to buy the new one. 

• • Kick out clause: Home sale contingencies aren't favorable to sellers, so sellers will sometimes request a kick out clause, which allows them to field other offers while the buyer works to sell their home. If the seller gets another offer that they want to accept, the buyer gets an opportunity to remove the contingency and move forward with the sale. If the buyer doesn’t take this option, the seller can terminate the deal in favor of the other offer. 

• First right of refusal (often listed as “Active – First Right”). In this contingency, sellers accept an offer but can still field other offers for a period of time. If they prefer one of those offers to the initial one, they can give the accepted buyer a chance to match it. If the buyer refuses to match, the seller can terminate the deal in favor of the new offer.

• Short sale. When an offer that’s accepted is considered a short sale, it has to be approved by external banks and lenders, which neither the sellers nor the buyers have control over. This means the process could take a bit more time.

• More than four months. An accepted offer that has been on hold for (just as it reads) more than four months. This delay could have anything to do with deal negotiations, construction, the processing period, or an agent oversight on the listing’s current state.

• Taking backups. While the sellers accepted the buyers’ offer, something went amiss during the final stage of the sale process. If the deal falls through, the sellers are now in a position to accept backup offers, and if a backup offer fits the bill for them, the sellers can pursue that sale. 

You can make an offer on a home during any stage of the process. Real estate agents can help you navigate deals that are especially complex or challenging. They can help you strategize and negotiate when trying to swoop on a home that is contingent or pending. 

Bungalow is the best way to invest and manage your real estate portfolio. We work with you to identify, purchase, fill, and manage residential properties—so that you can enjoy up to 20% more in rental income with a lot less stress. Learn more about Bungalow.