As with any industry, there is plenty of jargon to understand. There is some confusion with the difference between contingent and pending. I’ll break down what each means and why they are important to understand.
First, let’s understand the definition of each. The word contingent means that something has to happen before something else can happen. If activity A does not happen, neither does activity B. Pending means that an action was taken and it’s sitting in the waiting room for completion.
What the difference between contingent and pending mean in the house sale process.
The most common use of a contingency is with the buyer’s current house. Often if a buyer already owns a home, they have to sell it before the lender will issue the money for their new home. This makes the new home contingent on the sale of their old home. If the old home doesn’t sell, they cannot purchase the new one.
If you’re the seller, this is important to note on any offers you receive. There is risk accepting an offer with a contingent property. In our current fast paced market, more and more buyers aren’t adding this contingency because if a seller has two offers with one contingent and the other not, they will most likely accept the offer with no contingency.
Where To Look On A Colorado Contract
On a Colorado real estate contract, you can look at paragraph 10.7 to see if the buyer has a house they have to sell before they can close on yours.
Pending is most often used to describe a property that is under contract. The seller and buyer have signed an agreement and are moving toward closing day. There are speedbumps bound to happen, but they become negotiating points not contingent. Contingencies are more black and white, yes or no answers whereas something pending depends on another process but that process will have it’s own agreement.
For example, while the contract is pending, there is an inspection process. The buyer will submit to the seller what they want repaired. The seller will then negotiate what they are willing to take care of. The agreement to purchase is waiting for this to be resolved before moving forward.
The Confusion
I suppose it is contingent on agreement. If both parties cannot agree, then the contract is terminated, no longer pending. A tangled web we weave. Ha!
Thankfully, this is why you’ve hired a realtor. They understand all of these terms and can explain what they mean to you and your particular situation. If you’re in Pueblo Colorado and need some help, please reach out!
If you want to learn more words, head over to my Instagram where I drop a new word every week along with some other fun videos.