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Bottom Line Up Front

  • Homes under contract have an accepted offer, but there’s still time to put in a competing one.
  • Contingent home sales are on hold, but only for as long as it takes to meet stipulations.
  • Pending homes are on their way to a final sale, barring any extraordinary circumstances. 

Time to Read

3 minutes

August 10, 2022

Browsing the market for a new home can be a fun experience, and looking at listings is a great way to get a feel for what’s out there. But some listings can leave you with more questions than answers—especially if you’re unfamiliar with some of the different terms and designations of homes for sale. 

Do you know the difference between under contract, contingent and pending listings? You’re likely to see all 3 while browsing online listings, and it’s important to know what they mean. Here’s a closer look at these definitions and what they mean for you as a potential buyer.

What Does “Under Contract” Mean?

When a home is under contract, it means that there’s an accepted offer, and that both the buyer and seller are in agreement when it comes to the selling price. However, this is just the formalization of an accepted offer—it doesn’t account for any conditions that must first be met, or contingencies. At this point, the seller can still accept other offers and the buyer can still back out if a home inspection turns up an undisclosed or severe issue with the property. Bottom line: There’s an accepted offer, but still time to put in a competing bid on a dream home.

What Does “Contingent” Mean?

A contingent designation means a home sale is in limbo until certain criteria are met. The sale can’t move forward until the buyer or seller fulfill agreed-upon expectations. This might involve a sales contingency, which halts the sale until the buyer sells their existing home. Or, it could involve a repair contingency that the seller is responsible for. There’s typically a contingency period of 30 to 60 days. Bottom line: If the parties meet contingencies, the sale moves forward. If not, it falls through.

What Does “Pending” Mean?

After waiving or fulfilling all contingencies, a home sale is pending. Technically, the sale hasn’t closed yet, but at this point, the property is taken off the market and the seller can’t accept any offers. The only things standing between a pending home and the final sale are the appraisal and financing. If one or both falls through for any reason, the sale will void and the home will go back on the market. That said, homes that reach the pending stage are usually well on their way to closing, with most factors accounted for. Bottom line: Pending homes are as good as sold, unless an extraordinary situation arises.

Get to Know the Status of the Market

Knowing the difference between under contract, contingent and pending can help homeowners navigate the market better. For even more peace of mind, make sure you’re working with a knowledgeable real estate agent who can help you act fast (and with confidence) once you find a home you love. 

For even more peace of mind, don’t forget to check out HomeSquad from Navy Federal. It’s the simplest way to apply for and manage your home loan.

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This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.