Contingent vs. Pending Offers: What’s the Difference?

As a prospective buyer, you may come across contingent offers and pending offers. While you may not think much of it, these terms have distinct meanings in real estate. Knowing the differences of contingent vs. pending offers can help you better understand the homebuying process and make a more informed decision when purchasing a house. 

In this post, we’ll explore contingent and pending offers, how they differ, and how it applies to your house hunt.

Pending vs. Contingent: What Is a Contingent Offer?

Contingent means that certain factors must be met before a real estate transaction is completed. A contingent status on a listing indicates that the home buyer and seller have signed a purchase and sale agreement, but the deal is not officially done yet. The house remains on the market and is still listed on the multiple listing service (MLS) or sites like Aalto until it is.

Types of Contingencies

Here are some of the common contingencies you’ll find in a real estate contract:

• Appraisal contingencies: An appraisal contingency requires that a house gets assessed for the agreed-upon purchase price. If the appraisal comes in too low, there’s an appraisal gap. In other words, the mortgage lender may not loan the amount the buyer needs to close on the home.
• Financing contingencies: Also known as mortgage contingencies, this contingency protects you if you’re unable to get your home loan approved within the agreed-upon time frame.
• Home inspection contingencies: When you become a homeowner, you’re officially responsible for the entire house: flaws and all. Home inspections identify potential problems with a house that you can’t always see. No one wants to discover that their new home requires $20,000 in roof repairs after they move in.
• Title contingencies: A home’s title is its record of ownership. It details who the past and current homeowners are. Title companies research a house’s title to identify any liens or property disputes. If a general contractor is owed $10,000 for a kitchen renovation, or if the house has an undisclosed heir, a title contingency gives the potential buyer a way out of the sale. Otherwise, they would inherit the lien or get thrust into a legal battle over the home.

Without these home sale contingencies in place, a buyer risks losing their earnest money deposit when backing out of a sale.

Common Contingent Statuses

Here are five typical contingent statuses you’ll see on real estate listings:

1. Short Sale Contingencies

The term “short sale” is a bit of a misnomer. They’re often anything but short. A short sale occurs when the seller agrees to accept less money than the amount they owe on the mortgage. In many cases, the seller in a short sale is a bank or mortgage lender, and they’re not exactly excited to be “shorted” on the deal. Completing a short sale often takes several months, during which it will continue to have an active listing status on the MLS and other listing sites.

When a house is marked as “Short-Sale Contingent,” it means that a buyer’s offer has been accepted and the home is no longer for sale. However, the transaction is still in process.

2. Continue to Show

When a listing is labeled “Contingent: Continue to Show” (CCS), there may be several contingencies that must be fulfilled before the transaction’s complete. In the meantime, the seller has decided to keep their home listed on the housing market and may be considering more desirable offers from other potential buyers.

If you find a contingent home with this status, contact the listing agent or platform to figure out what the offer is and how you can beat it.

3. No Show

As you can infer, a “No Show” contingency is the opposite of a “Continue to Show” contingency. In a “No Show” situation, the seller no longer shows the property or accepts backup offers. While it’s still a contingent listing, a “No Show” status indicates that the seller is confident that the contingencies will be met.

4. Kick-Out Clause

Some contingent houses will be listed as having a “Kick-Out Clause.” A kick-out clause means that all contingencies must be met before a specified deadline. Otherwise, the deal’s off. No kick-out clause means no deadline, and the seller or buyer can fulfill the contingent requirements at their own pace.

5. Contingent Probate

Houses with the “Contingent Probate” status indicate that the homeowner has passed away and their home is getting sold.

Pending vs. Contingent: What Does Pending Mean?

A pending sale occurs when a home listing is already under contract. In other words, the seller has already accepted an offer, and the contingencies were met.

However, this does not mean that the sales process is complete. Not all pending transactions end in a successful close. While pending homes are far less likely than contingent homes to end up back on the market, it’s not uncommon — especially in a challenging market.

Common Pending Statuses

Here are three types of pending statuses you may encounter:

1. Pending Short-Sale

A home labeled as “Pending Short-Sale” is actively undergoing the process of getting sold via short sale with the mortgage holder. Usually, when a home updates its listing from “Short-Sale Contingent” to “Pending Short-Sale,” the seller is no longer accepting backup offers.

2. Pending: Taking Backups

This status is comparable to “Contingent: Continue to Show.” A “Pending: Taking Backups” status indicates that the seller still agrees to show their home and may even be accepting offers. However, it’s unlikely that your offer will be accepted unless the seller’s transaction with the current buyer falls through.

3. More Than 4 Months

If a house listing has been “pending” for over four months, the MLS automatically ascribes a “Pending: More Than 4 Months” status to it. This status change may indicate that a transaction is taking longer than expected. However, it could also mean that the seller’s real estate agent forgot to update the status of the house.

Making Offers on Contingent and Pending Homes

There’s no law that states that you can’t make an offer on a contingent or pending home. However, the odds of your offer getting accepted are usually less likely than if you were to make an offer on a house without a contingent or pending status. Of the two statuses, your odds are better with a contingency because those real estate transactions are not as far along. For contingent and pending homes, you must make a very attractive offer to grab the seller’s attention. Doing so will potentially help you move to the top of the list if their active transaction falls through.

We recommend contacting the listing agent to determine what offer will get the seller’s attention, if any. If you don’t, your offer may not be competitive enough for them to fall back on.

Improving Your Odds With Aalto

Buying a home is rarely easy, especially when your dream home comes with a contingent or pending status.

At Aalto, we’re committed to simplifying the homebuying process from beginning to end. Our self-service real estate platform directly connects you with homesellers, providing increased transparency, less stress, and greater savings than traditional real estate methods.

Are you ready to buy with confidence? Sign up and start shopping for homes online today!