With nearly 95% of home buyers using the Internet to search for a new home — and 74% of buyers looking to buy using a mobile phone — your home’s future owner might be just a few keystrokes or taps away. That’s why it’s important for your real estate agent to keep your property’s status up to date, both in the multiple listing service (MLS) that agents cooperatively use, as well as in online marketplaces, which pull data from the MLS. When your home first hits the market, your listing agent will note that it’s “Active,” as in ready and available for showings — but there’s a lot of ground to cover before your agent lists the status as “Closed,” when you have a done deal and you’re ready to hand over the keys. Let’s sort through how potential buyers and their agents view statuses such as “real estate pending” vs. “contingent,” so you can present your home accurately and still meet your selling goals. Whether your home is “contingent” or “pending,” you have an interested buyer and a ratified contract — meaning one to which all parties agree. In a nutshell, that means that all parties accept the contract’s terms, making it legally binding. However, there’s still some wiggle room as far as conditions that must be met. Enter the difference between “contingent” and “pending.” “Contingent” usually means that you, the seller, have accepted an offer, but the offer is contingent on fulfilling certain criteria. Now, keep in mind that there are approximately 600 MLSs across the United States, all which have slightly varying rules on listing statuses. In lieu of the label “Contingent,” you may also see “Active Contingent” and “Active Under Contract.” These labels essentially mean that although a listing is under contract with a buyer, a lot still must come together for this deal to close. In the meantime, with a “Contingent” status, the seller is typically allowed to continue showing the home and accept backup offers in the event something goes awry. So what are the contract stipulations that put a listing into that “Contingent” stage, and how common is it for a property to hang in closing limbo? According to the National Association of Realtors’ (NAR) May 2020 Confidence Index Survey, 76% of offers included contingencies. Here are 5 common contingencies in real estate contracts: If a property is “pending,” it’s either because there were no contingencies ever inked into the contract, or that all the contingencies have been satisfied, says real estate agent Jim Griffin, a single-family home expert serving Greeneville and Johnson City, Tennessee. In other words, “pending” is the next step after “contingent.” An offer has been accepted, and the sale “is expected to close.” In addition to “Active,” “Contingent,” and “Pending,” other statuses you may notice include: In addition to these statuses, agents can leave public comments, which syndicate to all viewers, or private comments for other agents about anything relevant to the seller’s situation, Griffin says. Agents also indicate in the MLS what he called “checkbox items,” or coded features, such as if a property has hardwood floors, if it’s a condo, or if it’s a foreclosure or a short sale. Guidelines from the NAR state that any change to a listing must be made in a timely manner. Most MLSs dictate that the representing agent update the status of a listing within a day or two, with a grace period for weekends and holidays. For Griffin’s market, if a property goes under contract, it generally needs to be marked “contingent” within 24 hours,” he says. “I can do that from my phone.” Unless your agent has noted otherwise in the MLS, “contingent” means that as a seller, you’re still open to additional offers. “If a property’s ‘pending,’ you don’t want to go out and look at it as a buyer,” Griffin says. The current parties have satisfied all contingencies, so “there’s no sense in [the seller] taking a backup offer.” Why have a backup offer on hand? Quite simply, life happens. A real estate contract has anywhere from a 1%-10% chance of falling through. (Terminated contracts represented only 2% to 5% of deals prior to the impact of the COVID-19 pandemic, which caused an uptick to about 9%, statistics show.) You reduce your stress by working with an agent who is proactive by thinking of “just in case” scenarios, such as issues with the home inspection or their financing falling apart because of a change in income. “If you’re selling your home and the buyer loses their job or something happens that disrupts the process of that transaction, that doesn’t mean that your goals change or that your family’s goals change,” Griffin says. “You can’t help if something happens to that buyer, but if you have a backup offer because your agent was proactive and fought for you, then you have the peace of mind: ‘OK, we don’t have to start all over again.’” Fielding offers while your property is “contingent” also allows you to remain competitive. Griffin recalled one instance where a sale was contingent upon the buyer selling his current home in Daytona Beach, Florida. Although the Florida house went under contract, something prohibited that buyer from closing the sale, which meant that Griffin’s client in Tennessee couldn’t close. However, because the Tennessee home was listed as “contingent,” the agent was able to get a backup offer for $15,000 more than what the Florida buyer had offered. “The backup offer came in knowing there was another offer on the table, and they wanted to make their offer very advantageous,” he said. Understanding the differences between “contingent” and “pending” gives you more insight into why some real estate agents liken transactions to dominoes, one hinging on another to fall into place. Consider each status another step in the process of selling your home and a day when you truly can celebrate your success.Contingent or pending, you’re under contract!
Contingent: The deal hinges on certain conditions
Pending: Your deal is almost done
What other MLS statuses do agents use?
How does a listing status get changed?
Pending vs. contingent: Is one better than the other?
