If you’re actively looking for a new home (or maybe even your first home), you’ve definitely encountered some terms you may not have understood or recognized. This can make an already stressful process even more frustrating! In this article, we’ll discuss two terms you may have come across while house hunting (contingent and pending), in the hopes of providing more insight into what they mean and why they matter when you’re searching for a home.
What Is A Contingent House?
The term “contingent” means the seller has accepted an offer so the home is under contract already, but some contingencies have not yet been met so they’ve chosen to keep the listing active in case things fall through. This means that both parties have agreed not to move forward with executing the deal as planned, whether it’s due to financing issues, problems that arose during the inspection or the buyer waiting on the seller to find a new home first. Once the problem(s) are addressed, the deal can move forward as planned.
Common Contingent Statuses
There are many common contingencies home buyers include with their purchase offers and there are a few you’ll want to better understand in case you encounter them while house hunting:
Short Sale Status
This is when a seller (typically a bank or other mortgage lender) has agreed to accept less money than what’s owed on the mortgage. These types of sales can take much longer to complete. If you see this status on a home, it means that it’s no longer for sale because the offer was accepted, but they’re moving through the short sale process which isn’t yet completed.
Contingent Probate Status
This occurs when the homeowner has passed away and the estate is being sold off.
Contingent-Continue To Show Status
Also sometimes known as CCS, there may be multiple contingencies that still need to be met and as a result, the seller and their agent have decided to continue showing the property and accepting offers from other potential buyers.
No-Show Status
In a no-show scenario, there are still contingencies waiting to be met, but the seller has decided they no longer want to show the property or accept offers as they feel all contingencies will be met as planned.
With Or Without Kick-Out Clause Status
If a contingent offer has the kick-out clause, it means the buyer has a deadline to fulfill all their contingencies. If you don’t see this clause alongside a contingency, it means there’s no deadline for the buyer to complete what they agreed to complete.
What Is A Pending House?
The term pending house means the buyer and seller have agreed to each other’s terms and all contingencies have been met so it’s been marked as pending and is being taken off the market. While there’s still a chance that a pending home could return to the market due to inspection or financing issues, it’s much less likely at this stage.
Common Pending Statuses
There are a few different categories for pending status homes that each have their own meaning. Understanding how they differ and what boundaries they present will help you better navigate your options:
Short Sale Status
As with the short sale contingent status, this means the property is going through the short sale process with the mortgage broker and is likely not accepting any further backup offers.
Backup Status
This status means that although the listing is pending, the seller is still showing the property and accepting backup offers should the current one fall through.
More Than 4 Months Status
If a listing has been pending for more than 4 months in MLS, this status is added automatically. It could mean that something about the sale transaction has complicated the process or that the listing agent just forgot to change the status to sold after closing.
Making A Contingent Offer
Despite the fact that a property is listed in a contingent status, you may be able to make an offer. While the original offer will obviously take precedence if all contingencies are met, coming in with another offer could put you at the front of the line if the original offer falls through.
Making A Pending Offer
A pending status means that a property is further along in the sales process than a contingent status. While there’s no legal reason that would prevent you from making an offer regardless, it’s up to the owner and listing agent as to whether they’re still interested in looking at additional offers. If you see a home marked as pending and you want to make an offer anyway, it’s best to speak with the listing agent first to get a better idea of where their head is at when it comes to taking new offers.
Understanding these two terms and how they differ, will help you better navigate the realm of online house hunting, whether you’re buying or selling. The more you know, the better positioned you are to make an informed decision.