Contingent vs. pending real estate: What’s the difference?

Quick insights

• A “contingent” status means the seller has accepted an offer, but the sale is subject to certain conditions (i.e., inspections or financing). A “pending” status indicates that an offer has been accepted and the sale is further along, not yet final because of certain contingencies, such as an inspection.
• For homes listed as contingent, potential buyers may still have an opportunity to purchase the property if initial conditions fail to be satisfied.
• Buyers should ensure their offer is competitive, possibly offer a higher purchase price, stay in close communication with their real estate agent and be ready to step in if the opportunity arises.

You found what might be your forever home but notice that it’s listed as “contingent” or “pending.” What does this mean? While both contingent and pending mean that the seller has accepted an offer, neither necessarily means an offer you make would be left out in the cold. Let’s explore what contingent vs. pending means for your homebuying journey and how you still might be able to purchase the home you’ve been eyeing.

What does contingent mean in real estate?

Contingent means the seller has accepted an offer, but certain conditions need to be met before the sale closes. This means there’s still a chance that the sale could fall through and the house goes back on the market, should those conditions go unmet.

Common types of contingencies

Many contingencies arise in the form of “contingency clauses” stipulated in the offer or sales contract. These can be designed to protect certain interests of the buyer or seller and may be waived by the respective party should they choose.

• Appraisals: An appraisal contingency states that the offer is conditional based on the results of a home appraisal. Should the appraisal find a discrepancy between the appraised value of the home and the proposed purchase price, the buyer may maintain the right to withdraw their offer.
• Inspection: An inspection contingency, or “due diligence clause” is a clause that states that the offer is contingent on the results of a home inspection. The clause typically affords the buyer a specified time within which to conduct a home inspection. Should any undesirable findings turn up, the buyer can typically negotiate for repairs or financial compensation toward the purchase price — or withdraw the offer altogether.
• Financing: A financing contingency clause typically means that the offer is contingent on the buyer obtaining a mortgage or financing for buying a home. This may be in place to help protect the buyer from being on the hook for a home they cannot afford or are unable to find the desired financing terms for. If they’re unable to secure the amount or loan terms specified in the clause, the buyer can choose to withdraw the offer.
• Title: At the close of a sale, a title search is conducted to ensure that the seller has the rights to the property. A title contingency may allow the buyer to withdraw their contract should the ownership of the property come into question.
• Buyer’s home sale: Oftentimes, a buyer may sell their home to purchase a new one. A buyer’s home sale contingency may help protect the buyer from having to own two homes at once. It does this by making the purchase contingent on the sale of the buyer’s current home, usually by a specified date. If the buyer is unable to close the sale of their home by that date, the offer is rejected, and the sales contract is terminated.

Types of contingency statuses

You’ll typically find a contingent status on a multiple listing service (MLS). MLS platforms are private databases reserved for people with real estate licenses. If you want to learn more about the contingent status of a property, consider speaking with a real estate agent. Let’s take a closer look at the various types of contingencies below:

• Contingent no show: “Contingent no show" means that the seller has accepted the offer and that the property is no longer available for viewing.
• Contingent continue to show (CCS): This means that the seller has accepted an offer but that the property is still available for viewing until the contingency is met.
• Contingent kick out clause: A contingent kick out clause allows the seller to continue to field offers while a sales contract hinges on another contingency. This means the seller could accept another offer, such as one without a contingency, and “kick out” the original offer. When this happens, the buyer is often given a chance to waive their own contingency to close the sale before the sales contract is officially terminated.
• Contingent short sale: A short sale is when the seller accepts a price below their remaining mortgage balance on the home. This typically occurs in two scenarios: when foreclosure is imminent and the seller is hoping to close a sale in a short time, or when the foreclosure has occurred, and the owning bank or lender is trying to recoup losses quickly. In most pre-foreclosure short sales, the proceeds of the sale go directly to the seller’s lender, who then must decide whether to forgive the outstanding mortgage balance.

What does pending mean in real estate?

So, what is pending and how does it differ from contingent offers? In real estate, pending means that an offer on the property has been accepted and is currently being processed. This means there are no outstanding contingencies (or there weren’t any to begin with) and that the closing of the sale — in most cases — is just a matter of time. This doesn’t necessarily mean the sale will definitely go through, however. It just means that the sale is close to completion.

Types of pending statuses

Pending statuses are typically communicated from the seller’s real estate agent to the buyer’s real estate agent. Let’s look at some common pending statuses and what they mean:

• Pending taking back-ups: If you’re hoping to make an offer on a pending home, the “pending taking backups” status may be a good sign. This means that though the seller has accepted an offer, they are still fielding “back up” offers in case the sale falls through.
• Pending no show/do not show: This pending status indicates that both the seller and buyer are confident of the sale going through and that the transaction is nearing completion. The “no show” means the seller is no longer showing the property and it’s soon to be unlisted.
• Pending short sale: “Pending short sale means” that the property is approaching the end of a short-sale, meaning the seller is unlikely to accept offers.
• Pending more than four months: Pending more than four months means that the property has held pending status for more than four months and may indicate issues with closing the sale. In some cases, however, the property may have been erroneously listed past the closure of a sale.

Can you make an offer on a contingent home?

Making an offer on a contingent home involves specifying certain conditions that must be met for the sale to proceed. Here’s a general approach and a real-life example.

Steps to make an offer on a contingent home

The steps below could potentially enhance your chances of having your offer accepted, even on a contingent home:

1. Determine your contingencies: The most common contingencies include finance, home sale and inspection contingency. The offer can be contingent upon securing financing, selling your current home or upon a satisfactory home inspection.
2. Consult with your agent: Work with a real estate agent to ensure your offer is competitive and addresses your contingencies.
3. Prepare your offer: Make a competitive yet reasonable offer based on the market and condition of the property. Clearly state the specific contingencies with your offer. Suggest a timeline that works for both parties involved. You can also include earnest money in your offer to show serious intent and good faith.
4. Submit your offer: Present the offer to the seller or seller’s agent, highlighting the strengths of your proposal.

Example

You find a home listed for $350,000, but it’s contingent on the seller finding a new home. You currently own a home that you need to sell to afford the new purchase.

• Purchase price: $340,000 (slightly below the asking price to encourage negotiation)
• Home sale contingency: “This offer is contingent upon the sale of my current home, located at 123 Main St, by [specific date].”
• Inspection contingency: “This offer is contingent upon a satisfactory home inspection.”
• Closing timeline: “I would like to close within 30 days of my home sale closing.”
• Earnest money deposit: $5,000

Communication tip: It might be a good idea to include a personal letter to the sellers explaining why you love their home, which could help make your offer more appealing. After submitting the offer, stay in touch with your agent and be prepared to negotiate on terms. If the sellers need more time to find a home, consider adjusting your offer or timeline to accommodate their needs.

Can you make an offer on a pending home?

Making an offer on a pending home can be challenging, as it usually means the seller has already accepted an offer. On the other side, there are scenarios where a backdrop offer may be considered. Here’s how to approach this unique situation, along with a real-life example:

Steps to make an offer on a pending home

While making an offer on a pending home can be a long shot, being prepared and presenting a strong backup offer could increase your chances.

1. Understand the status: Confirm that the home is indeed pending and understand the reasons for its status (i.e., inspections, financing.)
2. Consult with your agent: Work with a real estate agent to assess whether the seller might consider backup offers and to develop a strategy.
3. Prepare your offer: Consider a competitive purchase price, possibly similar to or slightly higher than the pending offer if you want to stand out from other buyers. Specify your contingencies, such as financing or inspections. Include an expiration date for your offer to prompt the seller to respond promptly.
4. Submit the offer: Present the offer to the seller’s agent, emphasizing your readiness and seriousness to proceed.

Example

You come across a home listed for $400,000 that is currently pending but hasn’t officially closed yet. You’re very interested and want to make a backup offer.

• Purchase price: $405,000 (to entice the seller with a higher bid).
• Financing contingency: “This offer is contingent upon securing financing.”
• Inspection contingency: “This offer is contingent upon a satisfactory home inspection.”
• Expiration date: “This offer is valid until [specific date], which is 48 hours from submission.”
• Earnest money deposit: $7,500

Communication tip: It might be a good idea to include a letter explaining why you love the seller’s home, your intentions for it and your ability to close quickly if the current offer falls through.

Regularly check in with your agent to see if there’s any movement on the pending sale. If the primary offer falls through, be prepared to act quickly to finalize negotiations.

In summary

When it comes to contingent vs. pending homes, both mean an offer has been accepted but neither means the sale is final. Contingent homes are still waiting for certain pre-conditions to be met before the sale goes through, while pending homes have yet to finish processing the sale. If the home you want is contingent or pending, you may still be able to make an offer or view the property. 

Prequalification may help get your offer to the top of the stack when sellers start sorting through backup offers and alternate buyers. Consider consulting with a real estate professional to better understand your situation and potential options.

Contingent vs. pending FAQs

When navigating the real estate market, understanding the differences between contingent and pending statuses is key. Here are some FAQs to clarify these terms:

What does pending vs. under contract mean in real estate?

Both terms indicate a seller has accepted an offer, but “pending” usually refers to the final stages before closing.

How to make an offer on a contingent home?

Determine your contingencies, prepare a competitive offer and submit it to the seller’s agent.

Is It worth looking at a house that is contingent?

Yes, it can be worth it for potential backup offers if the current deal falls through.

Can a seller back out of a contingent offer?

Yes, sellers can back out if they receive a better offer or if contingencies are not met.

How long does it take to go from contingent to pending?

This can take a few days to weeks, depending on how quickly contingencies are resolved.

Can a seller accept another offer while contingent?

Yes, sellers can accept another offer but must honor the current contract unless it falls through.

Does contingent mean sold?

 No, “contingent” means the offer is accepted but still subject to conditions.