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OverviewContingent vs pending
Why would either not go through?Can a seller accept another offer?What happens if my contingent offer fails?The bottom line
n real estate, “contingent” means that a seller and buyer have agreed to terms on a property, but the final sale depends on certain conditions being met. We generally think of contingencies as buyer-related — a sale dependent on the buyer selling their current property or on the buyer getting final approval for financing. But there can also be contingencies based on the seller. One example is that the sale remains on hold until inspections are complete.

Defining the term is easy enough, but that doesn't fully answer the question "what does contingent mean in realty?" In this article, we'll get into the unique role of contingency in a real estate transaction.

What's the difference between contingent and pending?

The terms are similar, but there are some key differences.

In real estate, “contingent” and “pending” are similar terms referring to the status of a “for sale” property. Both mean that someone made an offer on a home, but there is a slight difference.·      

  • A property marked “contingent” is still active. The sale relies on all contingencies being met. These conditions may include things like the sale of the buyer’s current property, the approval of buyer financing or the completion of inspections.·      
  • A property marked “pending” means that the seller accepted an offer and the sale is in process.

A property can also be pending with contingencies. That means that the sale is in process, but there are still some conditions need to be met. In summary, a property that is “contingent” means that a buyer made an offer based on certain conditions. A property that is “pending” means that the seller accepted an offer, and the sale is in process.

Why would a pending or contingent sale not go through?

A pending or contingent sale is not final. There are several reasons either may not go through.

It's hard to list every reason a pending or contingent home sale may fall through. Some reasons include:

  • The buyer could not sell their current home and therefore cannot purchase a new home.·
  • The buyer’s financing falls through and they cannot secure a mortgage.
  • The home inspection reveals issues with the property that the buyer is unwilling to accept.
  • The appraisal comes in lower than the agreed upon sale price and the buyer and seller cannot agree on a new price.
  • The buyer changes their mind and decides not to purchase the home.·
  • The seller receives a better offer from another buyer and chooses to sell to them instead.
  • The buyer or seller decide not to move forward with the sale after a closing date delay.·
  • The deadline for the conditions to be met passes.· 
  • The buyer or seller decide to terminate the contract.·
  • The title is not clear, and the sale cannot proceed.
  • The seller is unable to transfer the property as per the agreed terms.·
  • One or more parties do not sign the required legal documents, or the documents are not compliant with state regulations.

By being aware of these potential challenges, you can be better prepared to handle them if they arise.

Can a seller accept another offer while contingent?

Basically, it all depends on the offer details.

A contingent property is technically still active on the market. The sale is not final until all conditions have been satisfied. Whether the seller can accept an offer while holding one with conditions depends on the agreement between the seller and the buyer.

In general, most contingency offers come with an expiration date and the seller may only consider other offers after that date. In fact, the seller maybe legally obligated to continue working with the original buyer until all conditions are resolved or the offer expires. Or there is a mutual agreement between the buyer and the seller to cancel the offer. In some cases, a seller may accept another offer. If this happens, the seller would need to inform the original buyer that they are no longer considering their offer.

Basically, it all depends on the details. If you are involved in a contingent offer, take care to review the terms of the offer before agreeing.

If a contingency fails, what happens with my offer?

Say you submit a contingent offer and it falls through, what happens?

If you put in an offer on a contingent home that fell through, there are a few potential outcomes. Some depend on the seller, some depend on what you want:

  • If the contingency involves your ability to sell your current home and you could not do so, you may still purchase the home if you are interested.
  • If the contingency involves you securing financing, you may still have an opportunity if you can find financing elsewhere.
  • If the contingency involves an issue found during the home inspection that you are unwilling to accept it, you can continue to negotiate with the seller. You may also walk away.
  • If the seller received a better offer from another buyer and chose to sell to them instead, you will need to look for another home.

The outcome will depend on the specific circumstances of the contract and the reason the sale fell through. It’s best to communicate with the real estate agent or the seller to get more information about the situation.

Is it worth looking at a house that is contingent?

It can be. If you find a home that has what you need, don't let a contingency scare you off. Let your REALTOR® know and they can look into it.

Whether it is worth looking at a contingent house depends on your personal circumstances and priorities. Here are a few things to consider:

  • Timeframe: If you are in a hurry to buy a house and the contingencies are not in your control, it may not be worth your time to look at it.   
  • Competition: If there are multiple offers on the property, including one that is not contingent, the seller may be more likely to accept the non-contingent offer. If you submit a non-contingent offer, you may get the house.
  • Risk: If the contingencies on the property are significant and difficult to meet, there is a higher risk that the sale will fall through. This may open the door for you or may clue you to potential issues.

If you are not in a rush to buy a house and you are comfortable with the contingencies and the process of handling them, it can be worth looking at a house that is contingent. Additionally, if the house is a perfect fit for your needs, and the price is right, it may be worth pursuing.

Ultimately, it is a decision that depends on your personal circumstances and priorities. It is also important to consult with a real estate agent or attorney to understand the terms and legal aspects of the offer.

The bottom line

A contingent home is technically still active and may be worth a look if it's got what you're looking for.

A contingent home is still active. The exact terms in the offer determine whether a seller may entertain other offers. So, if you find a home that you love, it may still be worth looking into as there are plenty of reasons that sale may not complete.

If you are on the other side and need to submit an offer with contingency, you should talk to your REALTOR®. They’ll help you navigate the space and keep you competitive in a competitive market.