When you're selling your home, it feels like there are an endless number of items to track. One of the most critical things you'll want to monitor is the exact designation of your listing status. Is your home contingent or pending? What's the difference between these terms in regards to real estate listings? Keep reading to find out!
The first step toward understanding the difference between “contingent” and “pending” is to break down what each word means in real estate transactions. Industry jargon can seem complex and inaccessible at first, but these two terms are surprisingly pretty straightforward.
Contingent Status
A deal is considered contingent when an agreement has been reached between the buyer and seller, but there is a contingency, or obstacle, that must be overcome before the sale can be finalized.
Pending Status
A deal is considered to have a pending status when an agreement has been made between the buyer and seller, there are no explicit contingencies to overcome, but the sale has not yet been finalized.
Contingent vs Pending: In Detail
Now that we know the definitions of each term, let's take a closer look at how they differ.
The most notable difference between pending and contingent is that a sale is only considered to have a pending status when everything is truly ready to go and there are no obstacles in the way. While it is possible, it is extremely unlikely that a pending sale falls through. Pending essentially means it is only a matter of time until the sale is successfully finalized.
A contingent sale, on the other hand, has one or more obstacles that need to be cleared before the sale can be finalized. The most common contingency clause is the buyer qualifying for financing from a legitimate mortgage lender ("financing contingency"), but there are others as well. An accepted offer may be contingent upon a home inspection or appraisal from a verified third party ("appraisal contingency" or "title contingency" or "inspection contingency"). Another frequent contingency is the buyer being able to sell their current home in an acceptable time frame – they do not want to be on the hook for two mortgages! A sale can have one or multiple contingencies; the longer the list is the greater the likelihood the deal falls apart. This is where having the guidance of an experienced real estate agent is clutch – they have seen every type of contingency come to fruition and will help you achieve a successful home sale.
Another key difference between these two real estate terms is that a pending sale is often considered to be further along than a contingent sale. This is because all of the paperwork has been signed and there are no roadblocks standing in the way of a successful transaction. Once a home has cleared the contingencies it advances to “pending” status.
The status of your sale process also has other implications that may be unique to your location and the specifics of your contracts. If your home is listed on the MLS, the listing agent will update the official status denoting if your sale has changed from active to indicate a sale has been agreed. Depending on the specifics of your situation, your real estate agent may still negotiate alternative offers with other buyers for your home. This is generally just a backup offer though; should your original deal break down during either a contingent or pending state.
Finally, it's important to note that a home can go from being contingent to being pending (and vice versa) at any time during the selling process. Reaching the finish line of a home sale is hardly a linear path. So, if you're in the middle of selling your home and you're not sure what status it currently has, don't hesitate to ask your listing agent for clarification. Contingent or pending, they will be happy to update you on the current designation of your sale process!
Conclusion: Pending Or Contingent Listing
Contingent vs Pending: Now that you know the definitions of each term and how they differ, you will always understand the current status of your real estate transaction and how close you are to finalization.
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