If you’re looking to buy a home, the current real estate environment can be very daunting.Between the pandemic, rising inflation, and the housing crisis, becoming a homeowner seemsmore unattainable than ever. In this article, you will find an overview of…
Real estate is a world of its own with its own jargon. In order to easily follow exchanges in this world, it is important to understand certain important terms used. Today, we cover two of these: contingent and pending.
Contingent vs pending are certain common terms that you may come across during your real estate journey. These terms are on a need-to-know basis especially if you’re looking to buy a house and are going through the listings.
So, what does contingent mean on a listing or what does contingent mean in real estate, and what does pending mean on a house?
- Contingent and pending are terms used to describe the status of homes listed for sale and determine what actions you can take with respect to putting in an offer
- Homes that are contingent have their deals more likely to fall through compared to homes that are pending already
- You can make offers on both contingent and pending homes depending on the specific nature of the contingency or sales pending
What is a Contingent House?
So, what does contingent mean anyway? And what’s it mean when a house is contingent?
Contingent on a house means that an offer has been accepted by the seller, however, certain other requirements would have to be fulfilled for the deal to close.
In essence, while the contract has been deemed favorable and consented to by both parties, there is more to be done before closing can finally occur.
A contingent house can be shown to other potential buyers who can also make offers, regarded as backup offers. The reason for this is that in the event that the initial deal goes awry, the seller has alternative potential buyers to explore.
The seller would not have to figuratively break a sweat. Contingent real estate does not happen all the time but is quite common. This is what mean
Unlike contingent definition in real estate, pending meaning real estate simply implies that the particular transaction has no contingencies present.
In other words, all contingencies have been fulfilled and dealt with and the property has successfully exited property status contingent. This is pending definition real estate.
This status is commonly referred to as sales pending meaning that the deal is expected to go through and the buyer should very likely close on the home.
Common Contingent Offer Statuses in Canada
Contingent statuses may vary depending on the real estate market that you are dealing with. For instance, the United States may have some other contingencies not considered in Canada. Here are the most common contingent statuses in Canada:
Short Sale Status
This refers to a situation where the seller is willing to accept an offer that is lower than their mortgage balance. Following this acceptance, the contingency would show that an offer has been accepted and the house is no longer up for sale. However, the deal is contingent on the sale being approved by the lender.
More often than not, short sale status deals fall through and the homes are usually put back on the market.
Contingent Probate Status
Contingent Probate status could be for a series of reasons, one could be the death of the owner.
Another could be when there is a dispute about who should receive the proceeds of the home sale or if the lawyer handling the sale would take a portion of the proceeds because they haven’t been paid upfront.
Probate contingencies are pretty rare and they feature an uncertain timeframe for completion.
Contingent-Continue To Show Status
The seller has reviewed and accepted an offer from a buyer, but there are still some contingencies that the buyer has to take care of. While that is being done, other buyers are allowed to view the property and submit offers should they deem fit.
A “Contingent No Show” status has the seller opting to no longer show the property even though the buyer still has some contingencies to take care of. This usually happens when the seller is confident that the buyer would definitely settle the contingencies and go through with the deal.
With Or Without Kick-Out Clause Status
A kick-out clause placed a deadline for the buyer to have fulfilled all contingencies. If there isn’t a kick-out clause, then the buyer has no deadline to deal with.
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Common Pending Offer Statuses
Acceptance of an offer by a seller may not automatically imply that the deal would go through. This is because there are several other options that the seller may be willing to explore as well as certain situations that prevent an instant sale:
Short Sale Status
A buyer and seller going into a purchase and sale agreement for a short sale must get the approval of the seller’s lender or bank. There might be a point transaction where the status of the listing would have to be changed to “Pending Short Sale.” Sometimes, approval would be required from more than one lender or bank. This may drag for months and there is a possibility that they may eventually reject it.
A “Pending – Taking Backup” status implies that while the listing is pending, the seller still has the home open for showings and is still open to accepting backup offers.
More Than 4 Months Status
“Pending – More Than 4 Months” status is an automatic tag that appears on listings that have been pending for over 4 months. This could be for a series of reasons, one of which is the fact that the deal could have closed, but the listing agent forgot to update the property status. It could also be an indication of the transaction taking longer than usual.
Frequently Asked Questions
Can I make an offer on a house listed as Contingent?
Your decision to make an offer on this type of house should depend on the contingent status being dealt with. However, if the situation permits for offers to be made, there is a possibility that it could be more complicated than it appears.
Also, you could make a better offer than the existing one and still miss out on the property. The initial deal on the property could fall through and someone else would come along and trump your offer. A solid backup offer is what could do the trick here.
Can I make an offer on a house listed as Pending?
The general answer is no. Usually, when a potential buyer submits an offer to buy a home, a clause would likely be included that prevents the seller from selling to someone else even if the offer is better.
Does pending mean no contingencies?
A sale pending meaning that the seller has accepted an offer and all contingencies have either been satisfied or waived. So, they would no longer be regarded as active listings. This is pending home meaning.
Contingent vs pending real estate is a pretty important concept that would guide the homes you make offers on. It is important to make offers for homes that you love and more importantly are in a great position to get. This would ensure that you do not end up with your offers coming up short.
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