How Pending and Contingent Home Sales Differ


When you set out to buy or sell a home, you are bound to see different statuses of properties online. Two of the more popular statuses generated from the Multiple Listing Service are pending and contingent.

The commonality between these two listing statuses found on many popular websites is that the home is under contract. In other words, a buyer and seller have agreed on and signed a real estate contract.

But there has to be a difference between contingent and pending, right? Yes, there is a difference, but it is relatively mild. Pending vs. contingent is vital to understand whether you are a home buyer or seller.

Let's dive in and take a closer look at each status.
Contingent vs. PendingDeposit Photos

What Does Contingent Mean in Real Estate Sales?

When a real estate agent marks a property "contingent" in the MLS system, it is because there are conditions in the contract that have not been met. These conditions are known as contingencies in real estate circles.

Some of the most common contingencies in real estate contracts are the following:

  • Home inspection contingency
  • Appraisal contingency
  • Mortgage financing contingency
  • Home sale contingency

Other types of contingencies could be found in a real estate contract, but these are the most common. As time goes by, each of these contingencies becomes satisfied.

The Home Inspection Doesn't Go Well

For example, a home inspection is usually done within 7-10 days of the offer being accepted on the property. A professional home inspector will look over the property for any defects. If the problems are significant enough, the buyer may decide to back out of the sale.

A home buyer terminating a sale over a home inspection is not uncommon at all, especially when the seller does not cooperate by offering to fix the issue or offer monetary compensation.

The Appraisal Comes in Low

The second contingency you will often see in home sales is an appraisal contingency. The contract language typically states that the home must appraise for the sales price or above. If the appraisal comes in below the contract price, the buyer may terminate the sale.

When a real estate appraiser deems the buyer is overpaying for a property, there is an appraisal gap. There are several ways appraisal gaps can be handled, but unless the buyer has waived the appraisal contingency, they will be in the driver's seat.

The Mortgage Contingency Clause

The mortgage clause in an offer to purchase contract will state that the buyer intends to procure financing for the property. The financing contingency clause will spell out how much money the buyer wishes to borrow and by when they will procure the financing from a lending institution.

If a buyer cannot get a mortgage by the specified date, they need to notify the seller in writing that they either need an extension or were unable to get financing.

A Home Sale Contingency

Home sale contingencies written into a real estate contract will state that the buyer needs to sell their current home before they will be able to proceed with the purchase. If they cannot sell their existing home, they will be able to terminate the contract to purchase.

Contingent Sales Can Come Back to The Market

Having a home in contingent status alerts other agents and potential buyers to the fact the home has conditions that need to be met. Any one of these contract conditions could cause the home to come back to the market.

If that happens, a new buyer can come forward to purchase the property.

What Does Pending Mean in Real Estate?

Homes generally change from contingent status to pending status when all of the above contingencies have been satisfied. Pending sales usually do not fall through unless something catastrophic happens, like the buyer losing their job right before the closing.

Real Estate agents mark homes pending when they are confident the sale is solid. However, it is vital to note that a home does not have to be put into contingent status even if there are open contingencies left to satisfy.

The listing agent may feel that the sale will not fall through and immediately mark the transaction as sale pending. For example, maybe the buyer only has a mortgage contingency, and they are preapproved for a mortgage.

The upside of making a home pending in many MLS systems is that the days on market for the property stop going up. Unfortunately, in many places, the days on market continue to increase as if the home is still currently for sale.

If the sale falls through, the property will look like it has been for sale for an extended period of time, even though it hasn't.

Final Thoughts

When a listing agent decides between making a home contingent or pending, it should be discussed with the seller. There are ramifications for this decision which the seller should have input. Remember, a home sale is never final until the deed is recorded at the local registry of deeds.

A Realtor never earns their commission until this happens. When home sales fall through, a real estate agent does double the work. Sometimes sales are easy, and other times they are not.

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Bill Gassett is an avid writer for numerous real estate topics including finance, mortgages, moving, home improvement, and general real estate. His work has been featured on numerous prestigious real estate publications.

Massachusetts State

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