Let’s say you’ve found your dream home online on the multiple listing service, but the status of the property is marked “active contingent.” What does “contingent” mean, and is the real estate still up for grabs? Does “active” paired with “contingent” mean that the property can still be yours, if you make the right offer to a seller?
Read on for some explanation about this real estate listing status and for some insight into making an offer that will make the seller and buyer happy when a property is labeled contingent.
What does active contingent mean?
If a home’s status is “active contingent,” it means that the buyer has submitted an offer to the seller with contingencies, or issues that must be resolved before the sale of the property can be finalized.
Once the contingency is resolved, whether it’s the buyers getting approved for a mortgage, selling their property, or the seller’s home passing inspection, the real estate sale can move forward. The status of the real estate will change from “contingent” to “pending.”
What’s the difference between active contingent and sale pending?
The biggest difference between contingent and pending listing statuses in the MLS has to do with the presence of a contingency in the sale. Some contingencies, such as a home inspection or a buyer’s approval for a mortgage, must be met. But if a house is described as “pending,” it means that no contingency exists or that all contingencies have been met, and a sale is pending. Some homes may also be listed as “short sale contingent,” in which case the buyers may be working to get approval for a mortgage, and sellers are seeking more offers.
This, of course, leads us to the big question: Should a buyer put in an offer on a property whose status is active contingent or pending? Often, your real estate agent can review the MLS and help you decide on the best move.
Putting in an offer on an active contingent listing
It’s important to not get your hopes up too high—because a contingent listing is, in fact, likely to sell. It doesn’t mean, however, that you can’t test the waters when making an offer on the property.
Brendan O’Donnell, a real estate agent with Center Coast Realty in Chicago, advises buyers to submit an offer to the seller, unless the seller’s real estate agents explicitly say they aren’t showing the property anymore.
“If a seller knows they have an attractive backup offer, they might be more willing to let that first deal fall by the wayside if something comes up during the contingency period—and go with the second buyer,” says O’Donnell.
When a property is labeled contingent, the key, he says, is to make the backup offer to the seller as attractive as possible.
“Submitting a fair price, waiving contingencies, agreeing to buy as is, and showcasing a solid, local lender go a long way in showing you are committed and are a worthy buyer,” he says.