Real estate listings use specific statuses to communicate the progress of a sale, offering potential buyers insight into whether a property is truly available or merely awaiting final paperwork. Understanding these terms is important for home seekers, as a property’s status dictates the likelihood of a successful transaction. The distinction between a house listed as “contingent” and one listed as “pending” represents two different stages in the journey toward closing. Knowing the difference helps buyers track potential homes and strategically plan their next steps.
Understanding Contingent Status
A property listed as Contingent indicates that a seller has accepted an offer, but the finalization of the sale depends upon the successful completion of one or more specified conditions. These requirements, known as contingencies, are legally binding clauses written into the purchase agreement that protect the buyer’s interests. The contract is ratified, meaning both parties have agreed to the terms, but the deal is not guaranteed to close.
The presence of contingencies means the contract carries a risk of failure if the stated conditions are not satisfied within the agreed-upon timeframe. Because of this uncertainty, the property is not considered fully off the market. Many Multiple Listing Service (MLS) rules allow the seller to continue marketing the home, which may include hosting showings or accepting secondary offers should the primary contract terminate.
Common Sale Contingencies
Contingencies are the primary hurdles that must be cleared during the initial phase of an accepted contract. They are included to protect the buyer from financial loss. The timeline for these conditions is usually strict, often ranging from seven to fourteen days for common requirements. Failure to meet any of these deadlines allows the buyer to legally withdraw from the contract and recover their earnest money deposit.
Inspection Contingency
The inspection contingency grants the buyer the right to hire a professional to examine the property’s condition within a set period, typically 7 to 10 days after contract acceptance. If the inspection reveals significant defects or necessary repairs, the buyer can negotiate with the seller for a price reduction or repairs. Alternatively, they can choose to terminate the purchase agreement without penalty. This clause protects buyers from inheriting unknown structural or mechanical problems.
Financing Contingency
A financing contingency makes the sale dependent on the buyer securing the necessary mortgage loan approval to complete the purchase. This requirement ensures the buyer is not obligated to purchase the home if their lender fails to approve the financing. The clause specifies a deadline by which the buyer must provide proof of commitment from the lender. If the financing falls through, the contract can be voided.
Appraisal Contingency
The appraisal contingency requires that the property be valued by a licensed appraiser at or above the agreed-upon purchase price. Lenders will not fund a loan for more than the appraised value, so this contingency protects the buyer from overpaying. If the appraisal comes in low, the buyer can negotiate with the seller to lower the price, pay the difference out of pocket, or exit the contract.
Sale of Home Contingency
This contingency is often considered the riskiest for the seller, as it makes the purchase dependent on the buyer successfully closing the sale of their existing property. This requirement significantly extends the transaction timeline and introduces an external variable the seller cannot control. Sellers may agree to this condition in slow markets. However, they often include a “kick-out clause” that allows them to continue marketing the home and accept a non-contingent offer if one arrives.
Understanding Pending Status
A property status changes to Pending once all major contingencies have been satisfied, waived by the buyer, or successfully resolved. This status signifies that the contract is considered solid, and the sale is progressing toward the final closing date. At this stage, the likelihood of the transaction failing is substantially lower because primary hurdles, such as inspection and financing approvals, have been cleared.
The Pending status means the property is taken off the active market. The remaining steps are largely administrative, involving the title search, final loan processing, and scheduling the closing. While a deal can still technically fall through due to an issue with final loan underwriting or a title problem, the expectation is that the transaction will proceed to completion. Many MLS systems prohibit agents from soliciting or accepting new offers on properties marked as Pending.
Key Distinctions Between Pending and Contingent
The fundamental difference between the two statuses centers on the level of risk and the probability of the sale closing successfully. A Contingent status carries a higher risk because the contract is still subject to various conditions that could allow the buyer to legally withdraw. The deal is in a state of flux, and the buyer is actively working to satisfy the contractual requirements.
The Pending status represents a low-risk scenario where the contract has moved past the period of due diligence. When a property is Pending, it is effectively a completed transaction awaiting a closing date. The remaining items are procedural rather than contractual escape routes. A Contingent property is still “active” because its sale is unconfirmed, whereas a Pending property is practically off the market.
Making an Offer on a Listed Property
The property status dictates a potential buyer’s ability to submit an offer and have it considered by the seller. For a property listed as Contingent, a buyer can generally submit an offer, which will most likely be considered a secondary or “backup offer.” Sellers often entertain backup offers to ensure they have a ready replacement contract if the current buyer fails to satisfy a contingency.
For a property marked as Pending, the window for new offers is typically closed. While there is no legal prohibition against submitting an offer on a Pending property, sellers are usually not accepting new contracts because they are confident the sale will close. A buyer’s agent would need to contact the listing agent to determine if the seller is willing to entertain a new offer, which usually only happens if there is an unexpected complication with the current contract.
How Backup Offers Work
A backup offer is a legally binding contract that a seller accepts from a second buyer while already under contract with a primary buyer. This mechanism provides a safety net for the seller, allowing them to maintain momentum without having to relist the property if the initial deal terminates. The contract includes an addendum stating the offer will only become the primary contract if the first buyer cancels their agreement.
If the primary contract fails for any reason—such as a low appraisal or an unsatisfactory inspection result—the backup offer automatically moves into the first position. Submitting a compelling backup offer, often with a robust earnest money deposit and favorable terms, is the only practical way to stay in the running for a desirable property that is already under contract. The buyer in the backup position must wait, but they gain the advantage of being next in line without competing with new buyers on the open market.