Contingent vs. Pending: What Do They Mean?

Pending and contingent both mean an offer has been accepted. However, contingent listings may not be as final.

When a home is listed for sale, the listing displays a property status. It could be active, contingent, or pending. Active means it is available. Both contingent and pending mean it's under contract and likely to sell, but contingent and Pending don't mean quite the same thing.

Contingent means there's a contract in place to sell the house, but certain conditions -- or contingencies -- must be satisfied first. Pending means the conditions have been satisfied and the parties are just waiting for the transaction to close.

We'll go over the details about what contingent and pending mean and how each status can affect the likelihood you'll be able to buy a house listed as one of these.

What Does Contingent Mean in Real Estate?

Contingent refers to a property's status when it is listed for sale. When a property is contingent, the buyer has made an offer that the seller has accepted. However, the offer is contingent upon, or conditioned on, certain things happening. If the conditions are met, the sale will go through. If they are not, the buyer can walk away, and the home will be listed for sale again.

Types of Real Estate Contingencies

There are several different types of contingencies a buyer may include when they make an offer. Buyers make sales conditioned upon specific things to protect their right to walk away from a home purchase if it turns out there are problems.

Here are some of the most common contingencies buyers include when making offers:

• Appraisal contingency: Homes must have a high enough appraisal value for the property to serve as collateral on the buyer's loan. An appraisal contingency makes a home purchase contingent upon the home appraisal showing the house is worth at least what the buyer is paying. If the house appraises for less, the buyer could walk away.
• Financing contingency: Most buyers need to finance a home. Financing contingencies protect them in case they can't get a loan. The purchase is conditioned upon them qualifying to take out a mortgage or other type of loan. Sometimes, these contingencies also specify the maximum interest rate of the loan too.
• Inspection contingencies: Buyers don't want to purchase a home with unexpected mechanical or structural issues or other problems. As a result, many make an offer contingent on the outcome of a home inspection.
• Title contingency: This gives buyers time to investigate the title (which provides proof of ownership) and make sure there are no competing claims or other encumbrances on the property that would interfere with the buyer's ownership rights.
• Home sale contingency: Buyers who need to sell their home before completing the purchase of the new property can include a home sale contingency in their purchasing agreement.

Any condition a buyer wants to ensure is met before a sale closes should be included as a contingency.

Common Contingent Statuses

Not all contingencies are created equal. As a result, there are different kinds of contingent statuses. Here are the most common:

• No-show: The seller is not showing the property to other buyers while it is contingent. This status is best used when it's very likely all preconditions of the sale will be satisfied, and the sale will go through.
• Continue to show: The seller is continuing to show the property and accepting backup offers. The seller can't just walk away from the contingent offer, but there may be a chance it will fall through, so it makes sense to continue to show the property to line up other possible buyers.
• Kick-out clause: A kick-out clause allows a seller to cancel an existing agreement if the seller gets a better offer with fewer contingencies. Usually, the buyer who made the contingent offer will have a short time (such as 24 hours) to clear the contingencies before the sale is canceled.
• Short sale: This status is used when the owner has accepted an offer on a home for less than the full amount owed on the mortgage, but the transaction still requires lender approval.

What Does Pending Mean in Real Estate?

Pending means that the contingencies or preconditions of a home sale have been met, but the sale has not closed yet.

A home could be pending for several weeks or even several months, depending on how long it takes to complete all pre-sale steps and depending on the date that the buyer and seller agreed on to close the deal.

Pending lets potential buyers know that the home will most likely be sold. However, it hasn't officially been sold yet.

Common Pending Statuses

Just as there are different kinds of contingent statuses, there are also different kinds of pending statuses. Here are some of the more common ones that you may choose for your home.

1. Pending - taking backups: This means that the home is likely to be sold, but the seller is still allowing others to view the property and make backup offers. The home is reasonably likely to sell, but the seller is hedging their bets in case it doesn't.
2. Pending - do not show: This means that the seller is no longer showing the home. Sellers will choose this status if they have a high degree of confidence that the home sale will go through.
3. Pending - short sale: A home will be listed with this status when the lender has approved the short sale, and the buyer and seller are just waiting for the transaction to be completed.
4. Pending - over four months: When a home is in pending status for over four months, the status is automatically changed to alert potential buyers that it has been pending for a long time. This usually means the agent has simply forgotten to update the status, or there are problems such as lengthy negotiations, issues getting a clear title or other issues with the closing.

Pending vs. Contingent for Sellers

Both contingent and pending mean that sellers are on their way to selling a home, but the sale has not finalized.

Unless the seller has also put contingencies of their own in the purchase agreement (such as making the offer contingent on the seller finding a new home), they must simply wait for the buyer to move through the process of satisfying the contingencies.

Once these have cleared, the listing moves to pending. At this point, the sale is almost certainly going through. If it doesn't, the seller would stand a good chance of keeping the earnest money deposit. Neither the buyer nor seller can back out of the transaction, and the seller is in a much more secure position than when the listing was contingent.

Pending vs. Contingent for Buyers

When a buyer has made an offer, and the listing is contingent, the buyer is in a good position. The buyer's offer has been accepted, and the buyer just has to wait for contingencies to clear. For example, the buyer has to wait for the appraisal, the inspection, or whatever other conditions they set.

Buyers can still walk away at this point if the contingencies are not satisfied, although they also have the option to negotiate with the seller if something goes wrong. For example, if the inspection reveals a problem, the buyer could negotiate for repairs or money off the home.

After all the contingencies have been satisfied, the transaction moves to pending. Buyers can't walk away anymore without losing their earnest money deposit. They just have to wait for the closing date and for their mortgage to be funded so they can officially become the owner of a new home.

Contingent vs. Pending FAQs

Need to know more about contingent vs. pending status in home sales ? Check out the answers to these frequently asked questions.

Is It Worth Looking at a House That's Contingent?

A house that is contingent is probably going to be sold to the buyer with the accepted offer unless something goes wrong. While you can still look at a contingent home, the chances of being able to buy it are likely low.

Does Pending Mean Sold?

Pending means that the home is on the way to being sold. The buyer has made an offer, all contingencies are cleared, and the buyer and seller are just waiting for the closing date to arrive to finalize the transaction.

Can a Seller Back Out of a Contingent Offer?

A seller usually can't back out of a contingent offer unless there is a kick-out clause or unless they included their own contingencies in the offer that are not fulfilled.

Final Thoughts: Contingent vs. Pending

Now you know the difference between contingent and pending on real estate listings, so you can make informed choices during the home-buying process. If you are ready to purchase a home of your own, get prequalified for a mortgage today.