Contingent or Pending - What's the difference?

What contingencies would a buyer have in place

When buying a home, buyer contingencies are put in place to make sure they have adequate time to do their homework on a property, which is, after all, one of your largest investments. Some contingencies that you will see are regarding:

Inspections: A good buyers agent will advise their client to have an inspection done on the property. An inspector will comb through the houses structure and condition. They will look for situations that may not be up to code for safety and health, such as pests or exposed wires. An inspection will also cover the homes visible skeleton from roof to foundation. Some buyers choose to waive their inspection. This may seem like it gives you the upper hand with the seller, but may cost you later when the rain starts dripping onto your face through the ceiling and you discover that deck you love so much is hosting Thanksgiving dinner for a colony of termites.

Appraisal: If the buyer is financing any part of their loan, the lender may require an appraisal from an unbiased third party. The appraiser’s job is to asses the home’s actual value vs the listing price, which is the sellers opinion of the homes value.  The lender does not just use the Zestimate® as an accurate value. 

Financing: The lender has to review the appraisal and make sure that this is a good investment on their end. If the appraisal comes back far lower than the amount the buyer is financing, the lender may not approve the loan.

Title: A title contingency protects the buyer and allows them time to check public records for any easements or liens against the property. This way you don’t find out later that the current owner made an agreement to let the neighbor park his camper where you’re wanting to plant your vegetable garden.

Can I still make an offer on a home that is ‘Contingent’?

The short answer is yes.

Since contingent means the listing is still active, talk to your buyer’s agent about making an offer. They will get in cahoots with the listing agent and be able to gauge how likely these buyers are to get all the way to closing so you can make the best educated decision.

Pending Sale

When “Under Contract” becomes “Sale Pending”, this means that all of the buyer’s contingencies have been met and they are waiting to close on this home. At this point the listing is no longer considered ‘Active’. But the wrap around porch is something out of your dreams? Well, you CAN still submit a back-up offer.

In a back-up offer situation, you agree to terms and a price. The seller signs an amendment that states if this current buyer does not purchase the home for whatever reason, it automatically goes to you next. How likely is this to happen? Not very, however, your REALTOR® probably has a story to tell you about the time a buyer backed out right there at the closing table, pen in hand. Weddings, and speaking with cash for houses buyers, aren’t the only time people get cold feet. New movie pitch “Runaway Buyer”.

Am I locked in if I submit a back-up offer?

If you had your back-up offer accepted and buyer #1 backs out, you will be asked if you want to be ‘Elevated’. Not to be confused with Chris Angel and levitating. Elevated means to get the process started to buy this home. If that time comes and you no longer want this home, you can choose to not be elevated without consequence and go about your business.

At any time after you submit a back-up offer, you can withdraw and submit an offer on another home. Only the buyer can do this, once a seller accepts a back-up offer they are held to it.

If you don’t want to go full on with an official back-up offer, another option would simply be to have your agent let the listing agent know you are interested without submitting an official offer.