Pending vs. Contingent: Which Status Is Better?

Real estate listings often display various statuses, which can be confusing for buyers and sellers. “Pending” and “contingent” are two common designations indicating a property is under contract but not yet sold. Understanding the distinctions between these statuses is important for navigating the real estate market, as they convey different levels of certainty regarding a transaction’s completion. This clarity helps in making informed decisions about whether to pursue a property or how to manage a sale.

Understanding Pending Status

A property listed as “pending” signifies an offer has been accepted and the contract fully executed. At this stage, all conditions in the purchase agreement have been satisfied or waived. The transaction is actively moving toward its scheduled closing date.

During the pending phase, activities like title searches, property appraisals, and buyer’s final loan approval are underway. For buyers, a pending status means the property is off the active market and unlikely to become available again. Sellers view a pending status as a strong indication their property is close to being sold.

While a pending status suggests a high probability of sale completion, it does not guarantee it. Transactions can still fall through due to issues like a buyer’s financing collapsing, a low appraisal, or title discrepancies. Such occurrences are less common than with contingent sales.

Understanding Contingent Status

A “contingent” status indicates an accepted offer, but the sale depends on one or more specific conditions, known as contingencies. These conditions must be satisfied within a defined timeframe for the contract to proceed. If a contingency is not met or waived, either party may terminate the agreement without penalty.

Common types of contingencies include:

• A financing contingency, which requires the buyer to secure loan approval.
• An inspection contingency, allowing the buyer to conduct a home inspection and potentially renegotiate or withdraw.
• An appraisal contingency, ensuring the property appraises for at least the agreed-upon price.
• A sale of buyer’s home contingency, meaning the buyer must sell their current residence before purchasing.

Until all contingencies are removed or fulfilled, the deal remains less secure than a pending sale. For buyers, a contingent property might still present an opportunity to submit a backup offer, especially if the primary offer has a challenging contingency. For sellers, a contingent status means they have a buyer, but the transaction’s completion is not yet guaranteed.

Comparing the Statuses

When comparing “pending” versus “contingent” statuses, “pending” indicates a significantly higher probability of the sale closing. In a pending transaction, major hurdles and conditions outlined in the purchase agreement have been cleared. The deal has progressed past initial stages of negotiation and condition satisfaction.

Conversely, a “contingent” status carries greater uncertainty for both parties. Unmet conditions mean the deal can still fall apart if requirements are not fulfilled. For instance, if a buyer cannot secure financing or a home inspection reveals costly repairs, the contract may be terminated. This makes contingent deals less secure and more susceptible to cancellation.

For prospective buyers, understanding this distinction is important. A pending property is beyond the point where new offers are considered, as the existing contract is robust. However, for a contingent property, especially one with a difficult contingency like the sale of the buyer’s current home, submitting a backup offer is a viable strategy. Sellers with contingent properties remain open to backup offers, providing an alternative if the initial contract fails to close. While both statuses mean a property is under contract, “pending” signals a more advanced and likely-to-close stage of the real estate transaction.