When you start your search for a home it is possible to miss a property that has been listed for sale. Maybe you were busy and weren’t checking your favorite real estate sites?
Whatever the reason you might find that your dream home has gone under contract. Does that mean that all hope is lost and you have no chance to purchase this home? Not exactly.
Some homes do go under agreement and then come back on the market. Many buyers will ask real estate agents the meaning of under contract.
Let’s have a look at some of the listing statuses and their meanings. That house you love may not necessarily be out of reach.
What does contingent mean in real estate?
Contingent means that the agreement between the buyer and seller is based on something that may or may not happen – in other words, it’s a conditional sale. If either party fails to meet their obligations under the agreement, then the sale can be rescinded (made null and void).
There are three common contingencies found in most real estate contracts. They include a home inspection contingency, appraisal contingency, and mortgage financing contingency.
Occasionally, there will be a home sale contingency but that is far more likely in a buyer’s market.
Any ones of these contingencies could make a home come back on the market. The most likely of the four is a home inspection contingency.
Many home sales fall through due to surprises found by a professional home inspector. Sometimes the buyer and seller cannot figure out a remedy that will satisfy both parties.
When that happens a house will come back on the market.
What does pending mean in real estate?
When a real estate transaction becomes pending it means that a formal offer to purchase has been ratified by both the buyer and seller.
In many areas around the country a home will be moved from contingent status to pending status when all the contingencies in the contract have been satisfied.
When sales move from contingent to pending they are usually near the agreed upon closing date. Homes that have been moved to pending status are less likely to fall through.
Does that mean it won’t happen? Certainly not. If the buyer loses their job a week before the closing and no longer has financing, it is likely the sale will be terminated.
The buyer will be out of luck and the seller will be forced to re-list. It could become an opportunity for a new buyer to pounce on a home they love!
Sometimes real estate agents who are confident in a sale taking place will move a home under contract right into pending status.
The advantage of doing so is that the days on the market no longer continue to accumulate. Long days on the market is never a good thing for a home seller.
Increase your chances of landing a home by writing a backup offer
If you want to increase your chances of landing a home, you should write a backup offer.
A backup offer is a written contract from a buyer to seller that will be presented if the first buyer cannot perform under the contract.
The backup offer would then be in position to take over the transaction and become the new buyer for a property.
When you have missed out on a home that has gone under contract, writing a backup offer is a smart move.
It will put you in the best position to land a home you truly love.
By making a backup offer, you will show that you are serious about buying the home and will make it more likely that the homeowner will accept your offer.
In real estate sales there are many “you never know” situations. Don’t automatically assume the home you really want is out of reach. If history is any lesson it may not be.
Have your real estate agent closely monitor the situation. You might just find yourself in the property that you thought was out of reach.
Bill Gassett is a nationally recognized real estate leader who has been helping people buy and sell MetroWest Massachusetts real estate for the past 35 years. Bill is the owner and founder of Maximum Real Estate Exposure. For the past decade, he has been one of the top RE/MAX REALTORS® in New England.