The true cash buyer
For transactions involving a mortgage, the offer is usually contingent on approval of the loan—if the bank says no, the deal could fall through, but at the very least, will get a great deal more complicated. And this can happen even when a buyer is preapproved.
According to data compiled by the National Association of Realtors (NAR), it's estimated that about 5% of pending offers fall through. For perspective, NAR reports that about 4.71 million homes were sold in the U.S. in 2023. Based on NAR's estimate, that means roughly 247,500 home sales fell through in 2023.
When a home is pending, other buyers can't try to outbid the buyer for the property. Unless the sale falls through, your chance to buy the home has most likely passed. While it's unlikely the original deal will fall through – it's not impossible.
When a home is pending, the seller has accepted an offer and all conditions have been met for the sale to close. The buyer has fulfilled their contingencies or waived them all together. Sometimes, a listing will go straight from active to pending — often when there's an all-cash offer involved.
A pending transaction on your bank account means your bank is processing a purchase you made, a bill you paid, or a deposit that's heading your way, but it hasn't been completed yet. Either the payment hasn't been sent to the vendor yet or the incoming funds haven't cleared, although they are in process.
A pending status means a home sale isn't complete. So, in theory, you could still visit the property. But if the seller signed a contract without a kick-out clause, they won't be able to show the house or accept offers. Most agents discourage buyers from viewing a pending house since it can be a waste of time.
Yes, a seller can back out of a purchase agreement. If their reason for canceling is allowed in the contract, such as an unmet contingency, the seller can back out without penalty.
Among contingent offers, less than five percent fall through, according to multiple sources. Broken offers may arise because the buyer isn't able to secure financing or because the seller isn't willing to lower their listing price after a low appraisal.
Pending offers (on average) tend to last anywhere between a week and two months, but delays do happen.
If the buyer cannot remove the contingency, the contract is terminated, the seller can accept the other offer, and an earnest money deposit is returned to the buyer.
Setting an offer deadline allows sufficient time for the property to be marketed and shown to a wider pool of potential buyers. This broader exposure can lead to more interest and, potentially, more offers. Accepting a pre-emptive offer limits this exposure, potentially leaving higher offers undiscovered.
To cut to the chase, it really depends. Cash offers can benefit sellers by ensuring quick closings and fewer contingencies. But, if maximizing profit is your goal, financed offers may be better. The best choice depends on the seller's priorities and specific circumstances.
Cash offers can be appealing, as they close more quickly and are less likely to fall through because there are no lenders involved. But it's important to do your due diligence when dealing with cash-homebuying operations.
Cons: Home sales with any types of contingencies are usually slower than those without. It takes time to satisfy a buyer's contingencies and additional time to communicate that they have been met.
A property listed as contingent means the seller has accepted an offer, but they've chosen to keep the listing active in case certain contingencies aren't met by the prospective buyer. If a property is pending, the provisions on a contingent property were successfully met and the sale is being processed.
If a buyer's offer contains a condition or a contingency, such as the sale of the buyer's existing home, a bump clause allows the seller to accept the offer but continue receiving offers from other prospective buyers.
FAQs About Contingent in Real Estate
No, it's not possible to outbid a contingent offer. The seller has already accepted an offer while waiting for certain conditions to be satisfied before closing. However, some sellers will accept backup bids while engaged in a contingent offer.
Probably not, but read your contract carefully. Real estate agents are typically paid when you sell your home, so if your home doesn't sell, you shouldn't owe them a commission.
A seller can accept another offer when the buyer doesn't meet the demands. A low appraisal, not meeting the agreed terms such as buying a home as it is, or a delayed process can force a seller to look elsewhere.
According to the National Association of Realtors®, homes are usually listed as pending for 30-60 days. Each pending home's timeline is different, but the timing could be affected by issues with things like mortgage approvals and home inspections.
The contingency period typically lasts 30 days, but it varies by state. If you're buying a house, your agent will help you navigate all of this—especially if there are any contingencies on your end that need to be met before moving forward with a transaction.
If a buyer has been pre-approved and has a change in their status, such as difference in employment, new negative credit issue, accrual of additional debts, or a change in lender guidelines can cause the lender to cancel the financing.