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

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 period 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 in order 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.

Contingent 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:

• 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 either 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 or not 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. 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 or pending home?

Just because the home you want is in contingent or pending status, it doesn’t mean you have to abandon all hope. Sellers may still accept offers on contingent or pending homes. It all depends on the type of status. Getting prequalified for a mortgage and working with a real estate agent may help make your offer more attractive, possibly giving you the edge needed to tip the scale in your favor should the sale fall through.

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 on 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.