Contingent Vs. Pending: What’s The Difference? Real estate terms
When it comes to buying or selling a home, there are many terms and concepts to understand. The most commonly confused terms are “contingent” and “pending.” While these terms may seem similar, they have distinct meanings that are important to understand to navigate the real estate market.
Understanding Contingent and Pending Real Estate Terms
Understanding real estate terms can be an overwhelming experience for buyers and sellers. For example, terms such as “contingent” and “pending” are often used interchangeably but have different meanings that are important to understand.
Generally, contingent means the seller has accepted an offer but there are certain conditions that must be met before the sale is finalized.
Pending, on the other hand, means the sale is in its final stages, the buyers and sellers have agreed to all terms, and the closing date has been set. Before beginning the buying or selling process, it is important to understand the difference between contingent and pending so that buyers and sellers know where they stand in the transaction.
A real estate attorney can assist in making sure buyers and sellers understand all terms and conditions before signing any contracts.
Benefits of Understanding the Differences Between Contingent and Pending Real Estate Status
When it comes to real estate, understanding the differences between contingent and pending statuses is essential. Contingent status implies that the seller has accepted an offer on the property. However, the sale is dependent on certain contingencies being met. For example, if the buyer needs financing to complete the purchase, the status will remain contingent until that financing is secured.
On the other hand, Pending status means that all contingencies have been met and the transaction is in its final stages of development.
With this knowledge, buyers can make informed, strategic decisions on their real estate purchases. Additionally, sellers can better understand the timeline of their real estate transactions and plan accordingly.
Understanding the differences between contingent and pending statuses can help buyers and sellers make the best decisions for their real estate transactions.
When a property is listed as “contingent,” the seller has accepted an offer from a buyer, but the sale is still contingent upon certain conditions being met.
These conditions are typically spelled out in the purchase agreement and may include the buyer obtaining financing, completing a home inspection, or selling their own home.
During the contingency period, the buyer typically has a set amount of time to fulfill these conditions. If they cannot do so, the seller may cancel the sale and look for another buyer. However, the sale will typically move to the pending status if all conditions are met.
Once all the contingencies have been satisfied, the property will be listed as “pending.” At this point, the sale is considered almost final, and the only thing left to do is close the deal.
During the pending period, the buyer will typically finalize their financing, complete any necessary paperwork, and prepare for closing day. The seller will also need to ensure that any repairs or other tasks agreed upon during the contingency period are completed.
It’s worth noting that some real estate agents may use slightly different terms to describe these statuses, but the basic concepts are the same. For example, some agents may use “active contingent” or “pending continue to show” to indicate that the property is still available for showings.
Contingent Vs. Pending Which Status is Better?
From a buyer’s perspective, a pending property is generally more desirable than a contingent one, as it indicates that the sale is more likely to go through. However, it’s still possible for a pending sale to fall through if something goes wrong during the closing process.
From a seller’s perspective, a contingent property is still on the market and may attract backup offers if the current deal falls through. However, some buyers may be hesitant to make an offer on a property already under contract, even if it’s still contingent.
Ultimately, whether a property is listed as contingent or pending will depend on various factors, including the terms of the purchase agreement and the timeline for the transaction. However, understanding the differences between these two statuses can help buyers and sellers navigate the real estate market confidently.