Important points
A conditional home means the seller has accepted your offer, but the property is still active. Pending homes are currently unlisted and for sale. Contingencies are specific conditions that must be met during a real estate transaction. If these are not met, the buyer or seller can legally withdraw from the transaction.
When looking at homes for sale, you’ll often see properties labeled “Conditional” or “Pending.” This Redfin article explains what these terms mean and how they affect your chances of buying a home. Whether you’re looking for a condo in Miami, FL or a home in Minneapolis, MN, here’s what you need to know about conditional and pending listings.
What does contingency mean in real estate?
A conditional listing means the seller has accepted your offer, but the deal is contingent on meeting certain conditions, such as inspections and financing. It remains an active listing as the sale may still fail. Once all conditions are met, the sale will move to a pending state.
What are common contingencies in real estate?
Real estate contingencies can arise based on a variety of factors. Common contingencies when purchasing a home include:
Financing contingency: If the buyer is unable to obtain financing, the seller can opt out. Appraisal contingency: If the appraisal shows the home is worth less than the asking price, the buyer has the option to ask for a lower price or opt out. Emergency Inspection: If a home inspection reveals problems, buyers can request repairs, compensation, or opt out. Title Contingency: Buyers can opt out if the title report reveals a discrepancy in ownership status. For home sales: If the buyer is unable to sell their current home within the agreed upon time frame, the buyer can opt out.
Six common emergency statuses
When a house is contingent, there are several statuses that have different meanings. They are:
Dispatch – Continuing Display (CCS): A property may be marked with “Continue Display – Continuing Display (CCS)”. This means agents can still show homes. Buyers may have several contingencies that must be met. In this case, the seller may be actively accepting additional offers, so talk to your agent about the best course of action. Conditional – No Show: If a property is listed as “Conditional – No Show,” it means the home is no longer on the market or is no longer accepting offers. Despite the contingencies, the seller is confident that the offer will likely go through. Conditional – Kick-out Clause: A kick-out clause means the buyer must meet the terms by a certain date or risk losing the home. For example, if the buyer is unable to sell their current home by the payment deadline, the seller can opt out. Contingent – First Right: If the buyer does not match any additional offers made on the contingent house, the seller can opt out. Conditional – Short Sale: A short sale is the sale of a home for less than the mortgage payment. Short sales are typically initiated by a bank or mortgage company and can take several months to complete. “Conditional – Short Sale” means the offer has been accepted and a short sale is in progress. Conditional – Probate: If a property is marked “Conditional – Probate,” that means the home will be sold upon the death of the owner. Probate is the legal process of examining a deceased person’s assets and will to determine their distribution.
What does pending mean in the real estate industry?
A property on hold means the seller has accepted the offer and all contingencies have been met or waived. This is no longer an active listing and remains pending until closing, when all legal and financial requirements are finalized.
Four Common Types of Pending in Real Estate
There are several different types of pending sales in real estate. Some of the more common types include:
Pending – Get Back Up: The seller has accepted an offer on their home, but something went wrong at the last minute, including an offer contingency. The seller is currently accepting backup offers in case the deal falls through. Pending – No Show: If a home is “Pending – No Show” or “Pending – No Show,” it means the seller is no longer showing the property. Perhaps they are confident that the sale will go through. Pending – Short Sale: An accepted offer is a short sale and must be approved by additional lenders or banks outside of the buyer’s or seller’s control and may take a long time to process. Pending – More than 4 months: This means the accepted offer has been pending for more than 4 months. This may be due to negotiation difficulties, construction delays, or longer than usual processing times. In some cases, agents may have made an oversight when updating the listing status from Pending to Sold.
Can I make an offer on a temporary or pending home?
Yes, you can. A real estate agent with experience in complex transactions can help you navigate the process. If you really want to buy a home listed as conditional or pending, you need an informed strategy. Here are some things to consider:
Have your agent speak to the listing agent. Your agent should be able to tell you the current status of your signed offers. How do buyers and sellers feel about this deal? Does the current contract include a backup offer? Depending on what your agent learns, you can gain insight into the possibility of submitting an offer. Make a strong, competitive offer up front: If the market is competitive, make your best offer early, ideally above the asking price. A larger earnest money deposit and fewer contingencies (while protecting yourself) can also make your offer more attractive. Act quickly and flexibly. We inspect homes as soon as they hit the market and make offers right away. Flexibility in setting the seller’s desired closing timeline and move-out date can give you an edge over other buyers.
Frequently asked questions about conditional offers and pending offers
How often do occasional offers fail?
It’s rare. It’s difficult to track how many contingent or pending offers fall through each year, but according to the National Association of REALTORS®, about 5% of all home sales fall through. This means that most sales close, but deals can fall through for a variety of reasons.
Is pending the same as sold?
Pending is different from sold. This means that the seller has entered into a contract with the buyer to sell the home, but the sale is not yet final.
Can a seller withdraw a conditional offer?
it depends. Generally, the seller cannot withdraw unless the buyer fails to meet the contingency deadline or another clause allows it. For example, a seller may be willing to accept a backup offer in the event of a financial contingency and the buyer misses a deadline to secure financing. In that case, the preliminary buyer may end up purchasing the home.
Should I consider temporary housing?
Again, it depends. If you are considering putting your home on the market, talk to a real estate agent. Your agent may have more information about the condition of the home and whether the seller is open to alternative offers.
