What Does Contingent Mean in Real Estate?
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Let’s look at different types of contingent versus pending statuses and explore what they mean. A deal with fewer contingencies will likely move faster than one with many. And a deal with no kick-out clause may take particularly long, because there is no deadline set for the buyer to meet all necessary criteria. Here are a few different types of contingent listings that you might see on the market.
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Seeing a pending or contingent status on a home you love can be disheartening, but it doesn’t mean you’re without options. Contingent listings will often allow backup offers, though it’s unlikely you’ll be able to bid on a home that’s pending. Work with your agent to determine the best course of action for your unique situation. When a home is pending, the seller has accepted an offer and all conditions have been met for the sale to close. The buyer has fulfilled their contingencies or waived them all together.
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These conditions can be anything from the buyer securing a mortgage, the home inspection clearing, or the sale of the buyer’s current home. A listing that is short sale contingent means that the seller has accepted an offer and is willing to sell the home for less than the amount that they owe to their mortgage lender. Short sales can take a long time to complete because the lender is involved.
Contingent listing
During a home sale, contingencies are conditions or requirements that must be met for the sale to proceed smoothly. Even with a pending status, taking backups means a seller is still accepting backup offers on a home. A sale could go through or fall through, and the seller has noted they’re open to seeing what other potential buyers might offer. If you’ve put in an offer on a home and the status is now contingent, the seller has accepted the offer, but certain conditions must be met first. For instance, a buyer might request an inspection, or the seller could request a specific type of loan from the buyer. This status lets buyers know you’ve accepted an offer with contingencies.
Common Real Estate Contingencies
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As always, rely on your real estate agent to help you negotiate the best terms for your situation and make sure to start your mortgage application as soon as you’re ready to start looking at properties. By getting an initial approval ahead of time, you’ll be ready to make an offer that will stand out. Another way around this issue is to ask for a later-than-normal closing date, which gives you more time to sell your house. “Pending” means all contract agreements have been satisfied and both parties are working through legal paperwork to close. This is great for sellers ready to move to their new property, but it means a home is unavailable to prospective buyers.
The sale should close, and your best bet is to find another property to purchase. If this home is particularly desirable to you, however, it doesn’t hurt to contact the seller’s agent and let them know you’re interested—just in case the deal falls through at the last minute. The listing may even say “pending – taking backups” if this possibility exists.
Your home is still an active listing, so you continue showing your home and collecting offers from other prospective buyers. With this active status, days on market will continue to accrue, as well. It’s standard for lenders to require a home appraisal to ensure they aren’t lending more than the property’s fair market value. With an appraisal contingency, your home must appraise for an equal or higher value than the buyer’s offer for the sale to close. Other common contingencies include a mortgage or financing contingency and an appraisal contingency. A pending status indicates the seller and their agent are confident the sale has passed its major hurdles and is on its way to closing.
If the property doesn’t have a clear title and the title defect can’t be fixed easily, this contingency gets the buyer off the hook. Even all-cash buyers should include this contingency to ensure they won’t face ownership disputes after closing. Before going under contract, a buyer can get preapproved for a mortgage to give the seller more confidence that the deal will close. But the lender also has to approve the property—not just the borrower—so this contingency is key unless the buyer is paying cash. Each response has different implications for your home-buying journey, and understanding them can help you navigate the process more effectively. Always consult with your real estate agent to craft a strategic offer and to interpret responses from sellers accurately.
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If you’re working with a real estate agent, it’s likely you’ll be primarily focusing on homes listed with agents. The multiple listing service (MLS) is a database where real estate agents and REALTORS® can access homes that are listed with other agents. If your contingent purchase offer falls through, you’ll get a refund of your earnest money deposit if you or the seller are pulling out for a reason specified in the purchase and sale agreement. The seller will be free to accept a backup offer or put the home back on the market. A June 2023 study from the National Association of REALTORS® found that about 5% of all purchase agreements fall through, so a majority of contingent offers will make it to pending and closing stages.
This clause allows a buyer to walk away from a sale if their current home doesn’t sell by a specified date. If they secure a buyer and complete their home sale, the new purchase contract moves forward. When a property is marked as pending, an offer has been accepted by the seller and all contingencies have been satisfactorily addressed or waived. A home will remain in the pending state until all legal work has been processed. Sometimes buyers need to sell their homes before they buy another one.
Most people want homeowners insurance to protect their investment, and even if they don’t, their mortgage lender will require it. Some properties also require windstorm insurance and flood insurance. Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service. If the contractual conditions are met — both by the buyer and the seller — the sale will go through.
A contingent status with a no kick-out clause means that an offer has been accepted and the seller cannot accept another buyer’s offer. A contingent status with a kick-out clause lets a seller continue to market their home in the event that they receive an offer with contingencies. This allows the seller to “kick-out” a buyer with contingencies if a better offer comes around. Buying a home while preparing to sell your current residence can be complicated, so a home sale contingency aims to prevent buyers from paying two mortgages at once.
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