The hunt for your dream home is always an adventure. While searching online listings, you may have come across the terms “contingent” and “pending” on a listing. What does this mean? Do you still have time to put an offer on the home? Let’s find out.
What does contingent mean in real estate?
In real estate, you’ll often see the word “contingent” attached to a condition. Contingent means that an offer has been accepted by the seller, but the listing is still considered active until specific requirements have been met, such as the buyer sells their house. Once specific requirements are met (as defined by one or both parties), the listing status will progress from active to pending.
What does pending mean in real estate?
If you see the term “Pending”, you might want to hold off on putting in an offer. Pending means the offer has been accepted, and both parties are moving forward with the sale. Pending is used to describe the period from the time the contingencies are resolved until the close of sale.
Common Real Estate Contingencies
There are several different types of contingencies in real estate. Some of the more common ones are:
Many lenders put an inspection contingency on offers to make sure the home is worth the loan amount. An inspection contingency means both parties cannot continue to the buying process until an inspection of the home and property and property is completed to ensure the value is there. Investigations may turn up insect infestations, foundation, and structural issues, or even issues with mold.
If you are using a mortgage to purchase a home, most lenders require the buyer to have an appraisal done to the property ensuring the house is worth at least the price of the accepted offer. The appraiser will look for any damage, add-ons, or other high-value features that will add or detract from the home’s previous value.
If you choose to take out a loan to purchase your home, you may wish to include a financing contingency. A financing contingency provides a way for you to back out of the sale of the house if your loan falls through.
Home Sale Contingencies
As mentioned previously, a home sale contingency is an agreement between the buyer and seller that the seller will take the home off the market for a set amount of days in which the buyer hopes to sell their home . This contingency is one of the more riskier ones and is therefore used sparingly as sellers usually pass up offers with a home sale contingency for one that does not have it.
Common Pending Types in Real Estate
There are few different types of pending sales in real estate. The more common ones are:
Pending- Short Sale
This means the home is under contract and awaiting approval from the bank. Short sales have a reputation of taking especially long during the approval process, and many deals fall through at this stage due to the buyer finding a listing with a shorter timeline to closing.
Pending- Taking Backups
When you see this status, the buyer is concerned that the deal will fall through. You may place an offer on the property, and the seller will go to your offer if the current agreement doesn’t work out.
Can you make an offer on an active contingent?
Technically, you can make an offer all the way until the status states “Sold,” but it’s not advisable. The best time to make an offer on a home is when there are no contingencies or pending sales. The second best time to make an offer is when the status specifically states that they are taking backup offers. If the home status states “pending” or a non-backup contingency, it’s best to shelf that property and keep an eye on it as you search for another property to put an offer on.
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