Diving headfirst into purchasing or selling a home is fraught with excitement, anxiety, and possibly even some confusion regarding all of the details and terms being thrown around. In order to waylay some of the confusion and increase your confidence in your future real estate transaction, let’s look at the differences between a home that is pending vs contingent.
Before we get into the finer points of both terms, we need to examine each of these designations in a more general sense.
In both cases, a home on the market is considered contingent or pending only after the seller has accepted an offer, but it does not mean the home will not be up for grabs again.
A listing labeled contingent is a situation where the buyer has accepted an offer from a potential buyer but makes the decision to keep the listing up in case things fall through. This could, but does not necessarily, signal that the seller believes things will not get to closing.
This does allow other buyers to keep an eye on things and swoop in if the sale fails based on failing inspection, or if the appraisal creates a problem with the buyer’s financing.
A home given this designation currently is going through the initial steps toward closing, but still has hurdles to overcome before everything is really on its way to being completed at closing.
The next step in the process is a pending listing.
A listing labeled pending means the seller has accepted an offer from a potential buyer and is sure the transaction will see smooth sailing toward closing. The reason for this high level of confidence in the sale can be due to contingencies either being non-existent, having already been fulfilled, or all questions related to financing and negotiation already having been dealt with.
Pending sales also are not set in stone, and there’s always a possibility that a buyer gets cold feet.
Types of Contingent Listings
Now that we’re familiar with the general concept of a contingent listing, we can dig a little deeper to see the different ways these listings can take shape.
The two most rudimentary types of contingent listings are “continue to show” and “no show” listings. These are fairly self-explanatory, but they mean that, despite the accepted offer, the seller is either willing to continue showing the property to additional interested parties and entertain other offers or not, respectively.
Sellers can also request a deadline – called a “kick-out clause” – be inserted into any agreements with buyers.
A final type of contingency is a short sale, where the seller – often a bank or other mortgage lender – attempts to offload the property for less than the remainder of the remaining mortgage. Short sales are usually closed to additional offers in part because they require a large time investment to close.
Types of Pending Listings
Finally, there are a couple of less typical reasons for pending listings to cover.
In some instances, a seller with a pending transaction will do their best to move forward with the current offer but is also willing to accept new offers. This could be due to irregularities with the current offer or a lack of confidence in the buyer as time has gone on.
If you’re dealing with an agent, they will have access to the Multiple Listing Services, or MLS. If a listing has been sitting as pending for over four months, it will be updated in the MLS to indicate this. It’s another indicator that maybe things aren’t quite going as planned, but it can also be due to user error when an agent fails to mark the listing as sold.
Understanding Contingent vs. Pending in Summerville
If you need assistance understanding all the real estate terminology, including contingent and pending, contact our professional team today at (843) 696-1487!