You may feel frustrated and confused if you search for homes for sale online on your own. Other than “active” homes for sale, there are also pending and contingent listings, homes not yet on the market, and other quirks. We can help you save money and score the home of your dreams if you’re looking at one of these listings right now. Contact an Up Nest agent today to learn more about how we can help you.
Pending Real Estate
When a listing is marked “pending,” it means another buyer has already contracted for it. The seller has already reached an agreement with another buyer. There is a pending sale, and all contracts and terms have been completed.
Many pending transactions, however, do not come to fruition. These reasons include several factors. If the buyer or seller has issues closing the deal, the property may end up back on the market. As the market changes over time, the percentage of failed pending transactions can vary from just 3% to double digits, depending on the market course and the lender’s lending standards.
Contingent Real Estate
When a property is listed as “contingent”, buyer and seller have entered into a purchase and sales contract, but the closing is still pending one or more factors. It is expected that this contract will close just like any other pending transaction. These may fall through if there are certain or additional contingencies that give the buyer a chance to cancel.
Contingency for home inspections
Whether or not the home is sold “as-is,” the buyer may still have it inspected professionally. Likely, the mortgage lender will also require this. A buyer may have the right to withdraw from the contract and receive a refund if the repairs are excessive.
The title contingency
A title search will also be requested by the buyer and lender to determine if there are any liens and to verify the legal description of the property and the identity of the vendors. A title insurance policy should be purchased by the buyer. Lender’s title insurance will cover the interests of any involved banks.
Owner of a pending or contingent property may still accept an offer
The owner of a pending or contingent property may still accept an offer. The decision rests with the seller. As soon as a client signs a contract, the Realtor should ask them if they would like the property to be marketed and offers accepted. Sometimes a seller and their agent will only agree to a contract with contingencies if they can continue to market the property and accept backup offers.
Real estate agents can find out this information from the seller’s Realtor by getting in touch with them on your behalf. Alternatively, your Realtor may be able to help you send in an offer if they are accepting backups. After the current deal expires or breaks down, that would be next in line. Many deals fall apart, so this is a wise move. Even if the seller is lowering the price and offering better terms, they may renegotiate with their buyer if there are no backup buyers. You will have a greater chance of getting this house if you make a backup offer.
The Realtor can make sure that you are the first to know if there are any issues or if the current deal expires, even if they do not entertain backup offers. Once you know what is happening, you can take action quickly.
The distinction between pending and contingent is that pending means there is already an agreement in place with another potential buyer. However, contingent means that one or more factors must be met for the closing to take place. The types and amounts of typical contingencies in real estate contracts are constantly changing based on the market’s demands, but here are some of the most common ones that are standard.
Financial contingencies clause
The buyer’s ability to obtain financing is a financing contingency in the contract. There may even be clauses in the contract setting forth the terms of this financing. The loan should be at least 95% LTV at a fixed interest rate of no more than 4% for 30 years, for instance. Buyers are protected from being caught by a lender working under the table at the last minute. Buyers who receive inferior loan terms have the option of canceling the contract and receiving their deposit back, or renegotiating or continuing the transaction.
These are commonly encountered contingencies. A customer doesn’t want to overpay on an overpriced property. An appraisal is also required by mortgage lenders to ensure that they aren’t lending too much.
The purchase price on the contract must be at least equal to the price on the contract to stand as a condition of the contract. Unless it does, the buyer can either cancel and receive their earnest money deposit back or renegotiate the contract. Most of the time, that’s the case since the seller will have a very difficult time selling to someone else at that higher price.
What are some simple exercises for improving memory?
Exercising (going for a run, biking) helps keep your mind active and focused on the tasks at hand. This will make it easier to remember things. So now that you know what pending and contingent mean, go forth into your world using them appropriately! However, before you go I would ask one thing of you. Please remember to never, ever spell the words “pending” or “contingent” with an e when using them in your future conversations. It is wrong and will make you sound very silly. The only time anyone has ever said this correctly was in 1811 when somebody wrote it that way by mistake, but even then they took it back two years later.