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House hunting is an exciting time and the more you know about the process the easier it is.
Familiarity with key real estate terms is helpful. Read below to learn the difference between contingent vs pending real estate.
When a listing is contingent, a buyer has made an offer and has been accepted by the seller subject to certain conditions. The conditions may include an appraisal, loan approval, inspections, and perhaps the sale of the buyer’s current home. Contingent listings are not considered ‘sold’, as sometimes contracts fail their home inspection
In almost all cases we recommend a home inspection that will provide a list of needed repairs. The inspection contingency protects the buyer and makes the seller aware of potential concessions the buyer might require.
An appraisal is a documented professional opinion of current market value relative to size,, location, features, and amenities. Appraisers compare the property with recent comparable sales of similar nearby properties. Appraisals determine how much money the lender will loan to the buyer. Lenders will loan buyers a percentage of the appraised value. An appraisal will also be needed to secure a line of credit that may be used for repairs and other upgrades.
Get preapproved! A preapproved buyer is more appealing than a buyer who is not preapproved. If preapproved, you can provide a letter from your lender with your offer.
READ MORE: A First Time Home Buyers Guide to Home Loans
You may need to sell your current home in order to purchase your next one. Sellers see this as a risk and may be unwilling to accept this contingency.
A good REALTORⓇ will help you gauge your timing and offer suggestions to make your offer more enticing to the seller.
A listing becomes ‘pending’ when the seller has accepted an offer from a buyer, the contingencies have been met, and the buyer’s lender has fully approved the loan. Pending means completion of the sale is expected to occur per the dates and terms in the contract.
SEE MORE: Common Real Estate Terms →
The final steps are the legal process necessary to transfer the title to the new owners.
Once you are under contract with a seller to purchase a home, it will take 30-45 days to work through the contingencies, finalize the loan and complete the process. It is important to be diligent, responsive, and flexible.
Marx-Bensdorf agents have years of experience; we provide our clients with expertise and guidance from start to finish.