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Under Contract vs Contingent vs Pending: What does this mean?

Posted by Nathan Garrett on Wednesday, November 11th, 2020 at 4:25pm.

what does under contract mean

With so many people searching for homes online it can be confusing when you see the same home listed on multiple sites but somehow they show a different status.

Leading to why one of the most common questions people searching for homes ask...

...is this home still available?

In real estate, some of the terminology can be used interchangeably which can just add to the confusion. One real estate website may have a home listed as Contingent and then another may have it listed as Pending. Leaving consumers questioning - What is going on with this home??

What does Active Status mean?

Active status homes

When a homeowner decides to sell their home and they list with a licensed real estate agent their home will be posted with the local MLS that the agent is apart of. When this happens, the current status of the home is now ACTIVE. At this point, the local MLS uses IDX (Internet Data Exchange) to syndicate the listing across all the different real estate websites. Now depending on how each website is set up the listing may display a different status in the below paragraphs.

What does Active Under Contract mean?

In Louisville, once a contract has been accepted the Seller has two choices on changing the status of their listing. They can choose ACTIVE UNDER CONTRACT or PENDING. If the Seller decides to choose ACTIVE UNDER CONTRACT they are continuing to allow other Buyers into the home in hopes to receive a backup offer. So typically if a home is listed for sale and the status is ACTIVE UNDER CONTRACT it is still available to show and possible backup offers.

What does Pending status mean?

Pending status homes

Pending status is somewhat similar to ACTIVE UNDER CONTRACT. The main difference is that the home is no longer available to show which drastically lowers the risk of a Seller receiving a backup offer. Sometimes we have people ask about properties they may be interested in but unfortunately, they are already under contract. They keep an eye on the home for weeks, then ask if the home has closed or if there is a possibility it may be coming back on market. Typically, a transaction may take anywhere from 30-45 days to close.

What does Contingent mean?

There can be a discrepancy in listings across so many different real estate sites. There are some national sites that may list a home as ‘contingent’ when the status her Louisville is actually ACTIVE UNDER CONTRACT. Most transactions will have some sort of contingency. Two common ones would be inspections and financing. However, the most common perception of contingent that comes to mind for people is that the current Buyers have to sell their current home in order to purchase this home. In the Louisville market, when a home has a ‘contingency contract’, there usually is not even a status change or a public note. Surprisingly, there may only be a mention in the agent notes that there is a contingency contract in place and there is a 24 or 48 hour first right of refusal.

Can you make an offer on a house that is Active Under Contract?

At this time (2020) we are experiencing a very strong sellers market. Homes are being sold within hours and sellers are receiving multiple offers. Buyers are competing against each other trying to be the winning offer. Once a seller has a contract on their home they may consider leaving the status of the listing as Active Under Contract. This will allow other Buyers the opportunity to still View the home and may be able to submit a backup offer in hopes of being the next in line if the first offer happens to fall through.

How long can a house be under contract?

Sometimes you find yourself falling in love with a house that is already under contract. Finding yourself tracking the home hoping to see if it fall through and come back on market. Typically the average length of a contract is between 30-45 days. However, there are some instances where there will be extensions and even take 60 days to close.

Author: Nathan GarrettNathan Garrett is a local real estate agent in Louisville KY. Creator of the GarrettsRealty.com website. He specializes in Real Estate in Louisville and Oldham County. Questions about buying or selling? Send him an email: ngarrett@garrettsrealty.com

 

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