As a home searcher, you may have come across the terms contingent and pending while browsing properties online. To understand these terms in detail, we have covered what pending vs contingent means in real estate and its subcategories.
- Contingent Meaning: Seller has accepted an offer with certain conditions yet to be fulfilled.
- Pending Meaning: Property has passed all contingencies and the sale is about to close.
- Making an Offer: Chances of acceptance are low for contingent and pending houses, but making an all-cash offer may increase your probability.
What is The Difference Between Pending and Contingent?
A property under contingent status signifies that a seller has accepted the offer, which is yet to meet certain contingencies. In common parlance, a contingency is a condition that needs to be fulfilled.
On the other hand, a pending status means that the property has passed all the contingencies and the sale is about to close soon.
An offer made on a house that is contingent or pending has less probability of being accepted.
Types of Contingent Status on MLS
The contingent status on the MLS comes along with multiple sub-categories. Here’s how contingencies are categorized to help you understand how far ahead a transaction is:
- Continue to Show: The seller has accepted an offer but keeps the listing active. This usually happens when the contract is likely to fall through.
- No Show: The seller is confident that the sale will close despite the contingencies.
- With Kick Out: The seller has accepted an offer with certain contingencies. However, they keep the property open for showings and may cancel the accepted offer on receiving another no-contingency offer.
- Without Kick Out: The seller doesn’t keep a deadline for the contingencies to be met. Even if they receive better offers, the seller cannot cancel the initial offer.
- Short Sale: In a short sale, the seller agrees to sell off their property for less than the listing market value to stop foreclosure, and the house is no longer available. The mortgage lender has to allow the seller to sell their property for less to recover the pending mortgage balance.
- Probate: The owner of the property has passed away, and the property will be transferred to the legal heirs. It also indicates that the executor will receive a portion of the home’s selling price.
Types of Pending Status on MLS
Most of the pending status on MLS is quite similar to contingent status. However, it signifies that the sale has passed all the contingencies and the sale is about to close.
- Taking Backups: The seller is still taking any backup offers in case the sale falls through before closing.
- No Show: The seller has stopped accepting offers or showing requests, as the sale is about to close soon.
- Short Sale: The house is in the process of being sold off for less than its market value, and the seller is not accepting any backup offers.
- More Than 4 Months: This status gets updated automatically when the house remains in the pending status for more than 4 months. It means that either the sale is taking longer than expected to close, or the real estate agent is yet to update the status as sold.
Bottom Line: Contingent vs Pending
By understanding the difference between contingent vs pending sale, you can estimate the probability of your offer being accepted.
Although the chances of an offer on a pending or contingent house being accepted are low, you can still make an offer. By doing so, you will get the first priority if the current sale falls through.
To ensure that your offer gets prioritized, you can make an all-cash offer with no contingencies. Otherwise, your safest bet is to make an offer on a live listing.
Frequently Asked Questions
1. How Often do Contingent Offers Fall Through?
According to the National Association of REALTORS, 5% of home sale contracts were terminated in May 2023.
2. Can You Make an Offer on a Contingent House?
Yes, you can make an offer on a house that is under contingent status. However, the chances of your offer being accepted are low and depend on the contingencies in the offer.
3. Can You Make an Offer on a Pending House?
Yes, you can make an offer on a pending house. However, the chances of your offer being accepted are low to none, as the house under pending status is already in the final stage of the selling process. At this point, the chances of the sale falling through are very low.