Have you ever spent time listening to real estate jargon? Sometimes it almost sounds like another language. When you’re trying to sell a house, that can add a layer of confusion to an already complex and frustrating process.
Of course, you don’t need to know every industry buzzword and catchphrase. But there are a few terms you should understand, and these two are among the most confusing: Pending sales and contingent sales.
Though “pending” and “contingent” are sometimes used interchangeably, they’re not the same. What they do mean for home sellers, however, is that just because you have an offer, it doesn’t mean the sale will close.
Here’s what you should know about contingent and pending sales… and most importantly, how to avoid both and secure a sale.
What is a Contingent Sale?
According to Realtor.com, a contingent sale means that a seller has accepted an offer, but that the sale will only close if certain conditions — or contingencies — are met.
The listing is still active until the contingencies have been satisfied. On average,
The conditions may apply to the buyer, the seller, or both. Forbes recently listed that common contingencies include:
- Home inspection: If the inspection finds repair issues, the buyer may request that the homeowner fix the problems or reduce the sale price
- Home appraisal: Lenders require an appraisal to determine a home’s value; if the value comes in under the sale price, an appraisal contingency may reduce the price, ask the buyer to make up the difference in cash, or allow the buyer to back out
- Home sale: A buyer may request a contingency that allows them to sell their own house first
- Financial contingencies: Gives the buyer the option of backing out if their financing falls through
What is a Pending Sale?
What if a home is “pending”? Also known as “under contract,” pending status refers to the time between contingencies being met and the sale being closed, as explained by Realtor.com. In other words, the sale is not quite finalized yet.
At this point, the home is no longer on the market. Usually, the home seller won’t take other offers; exceptions include pending short sales or “pending taking backups,” which means the seller has concerns about the buyer’s financing.
The average home sale takes over 50 days to close, according to Realtor.com, and a lot can happen during that time. Pending sales may fail for multiple reasons, including:
- Buyer’s mortgage loan falls through
- Property may have liens against it that prevent title transfer
- Buyer’s remorse; most contracts offer a two to three week option period in which they can back out
- Problems discovered during the home inspection
- The appraisal comes in lower than the sale price
Avoid Both Pending and Contingent Status with a Secure Sale
No matter what the reason behind a failed contingent or pending sale, it causes stress and frustration for the home seller. Fortunately, there’s a better way: Avoid the heartbreak of having your sale fall through at the last minute, and sell to HomeGo.
Because HomeGo buys houses with cash, you don’t have to worry about pending sales or contingencies. No appraisals or inspections are required. HomeGo sales close in as few as seven days and you won’t pay fees or commissions.
Avoid the stress and hassle… enjoy a quick, easy sale with HomeGo.