What's The Difference Between a Pending Sale & ...
Welcome to Success Real Estate, your trusted partner in navigating the complex world of real estate transactions. In this article, we aim to shed light on the difference between a pending sale and a contingent sale, and help you understand the nuances and implications of these terms in the real estate industry.
Understanding Pending Sales
A pending sale refers to a real estate transaction where a buyer has made an offer, and the seller has accepted it, but the deal has not yet been finalized. During this phase, the property is considered to be under contract, and the buyer and seller continue to work towards completing the necessary steps to close the deal.
Once a sale is pending, it means that both parties have agreed on the major terms of the transaction, such as the purchase price, contingencies, and closing date. However, there are still some remaining tasks to be completed, such as home inspections, appraisal, and securing financing.
Key Aspects of a Pending Sale
In a pending sale, the property is typically marked as "under contract" or "pending" in real estate listings and databases. This status indicates that the property is no longer actively marketed, and the seller is not considering other offers at the moment.
During the pending phase, the buyer may choose to conduct thorough inspections of the property to ensure that it meets their expectations and there are no major issues requiring repair or renegotiation. Similarly, the buyer's lender will initiate the appraisal process to determine the property's value and assess its eligibility for financing.
It's important to note that the pending status doesn't guarantee a successful closing. There are instances where a pending sale may fall through due to issues discovered during inspections, financing challenges, or unexpected circumstances. However, a higher percentage of pending sales do tend to proceed to a successful closing compared to contingent sales.
Unpacking Contingent Sales
A contingent sale, on the other hand, refers to a real estate transaction where the buyer has included certain contingencies or conditions in the offer. These conditions must be fulfilled for the sale to move forward. Common contingencies include inspections, appraisal, obtaining financing, and the ability to sell the buyer's existing property.
Unlike pending sales, contingent sales often involve a specific timeline within which the buyer must fulfill the outlined contingencies. If any of the conditions are not met, the buyer has the option to withdraw from the contract without any penalties. This gives the buyer flexibility and protection in case certain conditions are not met to their satisfaction.
Key Aspects of a Contingent Sale
In a contingent sale, the property is typically labeled as "contingent" or "active contingent." This status indicates that the seller is still entertaining other offers, and if a more attractive offer arrives without any contingencies, the seller may choose to accept it and proceed with the new buyer.
The terms surrounding contingencies are negotiated between the buyer and seller during the offer stage. The buyer must make a good-faith effort to fulfill these requirements within the agreed-upon timeline. If the contingencies are not met, the buyer has the right to back out of the contract and obtain a refund of any earnest money deposit.
Contingent sales can take longer to close compared to pending sales, as there are additional factors that need to be addressed and fulfilled. It's crucial for both buyers and sellers to closely monitor the fulfillment of contingencies to avoid delays and ensure a smooth closing process.
Conclusion
In summary, while both pending sales and contingent sales involve real estate transactions that have not yet closed, there are notable differences between these terms. A pending sale indicates that the buyer and seller have agreed on the major terms of the transaction and are working towards closing, while a contingent sale involves certain conditions that must be met for the sale to progress.
At Success Real Estate, we understand the importance of clarifying these distinctions to our clients. Whether you are a buyer or seller, knowing the implications and potential risks associated with each type of sale is essential in making informed decisions and navigating the real estate market with confidence.
For more information and personalized assistance with your real estate needs, please contact Success Real Estate today. Our experienced team of professionals is here to guide you every step of the way.
