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Contingent vs. Under Contract vs. Pending: What’s the Difference?

Stephanie Somers

Co-CEO of a successful 20+ person team, Stephanie Somers has been bringing her fierce loyalty, unrelenting work ethic, and constant pursuit of creativ...

Co-CEO of a successful 20+ person team, Stephanie Somers has been bringing her fierce loyalty, unrelenting work ethic, and constant pursuit of creativ...

Jan 20 7 minutes read

Most industries have their own language – terms, slang, abbreviations, acronyms, etc. – that, while maybe having an entirely different meaning in the ‘regular’ world, are used on an almost universal level amongst the professionals in said industry. The world of real estate is no different. Sometimes the terms used can be confusing, especially for first-time homebuyers (check out our blog for tips for first-time homebuyers). If you find a house for sale with a status listed as “sale pending,” “contingent,” or “under contract,” what does that mean, exactly? Is the house off the market, or can you still take a tour or make an offer? Let’s take a look at these (and some other common real estate terms) and what they mean when it comes to the availability of a house for sale, so as you begin your home-buying journey you speak the same language.

The Steps of a Home Sale

Before we dive deeper, let’s make sure we are all on the same page and understand the basic process of buying a house. Of course, every offer and sale can have some variations or hiccups along the way. But if everything goes according to plan, it will generally follow this path: 

  1. The buyer finds a house they are interested in.
  2. The buyer makes an offer and lists any contingencies (more on those later).
  3. If the seller agrees to the offer, they accept and both parties sign a contract.
  4. The home is inspected and appraised according to the contingencies.
  5. Any issues that come up in the inspection are addressed. Negotiations might include the seller making repairs or adjusting the sale price accordingly.
  6. If everything is resolved, the parties move on toward closing. If not, the buyer walks away and the house goes back on the market.

The sale is not final until the closing happens. If the sale is anywhere within this list other than number 6, it is possible for the deal to fall through. This means that another potential buyer can make an offer on a home—and possibly end up buying it—even if the seller has a contract with someone else.

Understanding MLS Statuses

MLS stands for Multiple Listing Services. The MLS is the online source (think Zillow) for homes that are on the market. The statuses that are listed in the MLS are initiated by the listing agent for the house that is for sale. As soon as an offer is accepted by a seller, the listing agent will change the house’s status to pending, contingent, or under contract. This signals buyers and other agents that a sale is in the works, but it does not mean the sale is completed. There is still a chance for another buyer to get the home should things fall through.

What Does “Under Contract” Mean?

House with "under contract" sign in the yard

Under contract means exactly that: there is a contract that has been signed by both a buyer and seller. The contract details how much the buyer has offered and any contingencies they are asking for. Earnest money is typically paid and placed in an escrow account when the contract is signed. Houses under contract might also show an additional status of “Show” or “No Show” in the MLS. Show means that the homeowner is still willing to have other potential buyers view the home. No Show means the opposite. Because they have a contract and are getting closer to making a final sale, they are not allowing agents to conduct tours or showings.

How About a Contingent Sale? What’s That Mean?

A house that is listed as “contingent” is also under contract. Contingent means that both parties are waiting for all of the requirements listed by the buyer to be addressed and taken care of. These often include:

  1. Inspection. The sale is contingent on any flaws found by a professional home inspector being fixed by the seller, or the sales price lowered accordingly. If the two parties can not come to an agreement about how the issues will be resolved, the buyer can back out.
  2. Financing. Even though a buyer may have pre-approval, they may have trouble securing financing when it comes to getting the loan. This could stop the sale from proceeding.
  3. Appraisal. The lender will insist on protecting their investment. This means that they will not approve a loan for more than the fair market value. 
  4. Title. If there are liens or other issues with the seller’s title, the sale will not be able to close.
  5. Buyer’s Home Sale. Buyers may include a contingency that if they can not sell their current house within a specified time period, they can end the contract with the seller.

A house listed as contingent may still be actively shown and the buyer may continue to accept offers if they wish. There is a chance that a contingent sale can fall through. If any of the requirements do not work out as spelled out in the contract, or if the buyer and seller can’t come to an agreement about how they are to be resolved, the buyer is allowed to back out of the contract.

So, Does Pending Mean Sold?

In many cases, a pending sale is no different than either of the other two statuses. Some agents, however, use the term pending once all contingencies are addressed and the parties are just waiting for the closing date.

It’s (Almost) Never Too Late to Make an Offer

If you are interested in a house and the status says it is under contract, contingent, or pending, it may still be worth pursuing. Follow these steps to toss your hat into the ring:

  1. Tell your agent you are interested and make sure they know you are serious. 
  2. Find out all you can about the current contract. Your agent may be able to talk to the listing agent and find out if the sale is likely or if there are indications that the deal could fail. 
  3. Make an offer. Many sellers will take backup offers in case the first one does not work out. You may be able to secure the first spot in line if that happens.
  4. Sweeten the deal. This is not a situation where a low-ball offer will work. Also, consider waiving contingencies (within reason). Many buyers have success writing a letter to the seller to make a human connection. You may not need to be the highest bidder to be their chosen buyer.

As we mentioned before, a sale is not final until closing. Until the final documents are signed, there is still the possibility that the deal could fall through. Some else’s loss could be your gain, allowing you to buy the house of your dreams.

Our Team Speaks the Language of Making your Home-Buying Dreams Come True

At The Somers Team, it is our collective goal to deliver an unmatched 5-Star Experience to each and every client. No two people or transactions are alike and we strive to tailor your home buying process to meet your needs and expectations. 

Are you ready to talk to one of our superstar agents and begin your home buying journey? Contact co-owner Stephanie Somers today at 215.398.5770 to learn more! 

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Greater Philadelphia Real Estate Team

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