So what does it exactly mean when your Houston home for sale goes into contingent or pending status? It is easy for all the different real estate terms to become confusing when selling your house but rest assured it is a lot simpler than it sounds.
Pending meaning when selling a house
When selling your Houston house all a pending status means is you have an “accepted and binding contract” with the potential buyer. Keep in mind this is not a guarantee that the home will sell and close on schedule. There are still things like contingencies that need to be met for the sale to go through. Pending offers can take up to 2 months or more depending on the hurdles of that specific sale.
For a deal to be truly “pending” a buyer and seller must remove all contingencies meaning both are locked in to complete the transaction. Of course, there are times when a buyer will just walk away from a deal in pending status even if it means forfeiting earnest money deposit to the seller or the possibility of being sued. A common saying in real estate is the deal is not closed until it is closed!
Contingency meaning when selling a house
When selling your Houston house it is very possible to have contingencies when accepting an offer. Contingencies are clauses that allow the buyer to “walk away” from buying the house. Yet, you have to wonder, why would a buyer walk away from buying a house they went under contract with if their goal is to become a homeowner? Your property is under contingent status when it is agreed certain conditions have to be met for the home sale to continue. Contingencies put the seller in a vulnerable spot where the house has to meet and satisfy those contingency requirements or the buyer can choose to back out of the deal legitimately without any penalty. Pretty much the buyer is in the driver’s seat when it comes to most home selling contingencies being triggered. You run the risk of having to put your property back into an active status which never looks good to potential buyers.
What are common home selling contingencies?
- Home Sale Contingency: Under this contingency, your buyer’s offer is completely dependant on the sale of their current home. This contingency will also have a term typically around 30-60 in which the buyer needs to complete the sale of their current house to then be able to purchase yours.
- Property Appraisal Contingency: This contingency means if your house appraises for below the offer value the buyer is protected and he can terminate the contract with you and earnest money is returned to the buyer.
- Mortgage Contingency: A mortgage contingency provides the buyer with 30-60 days to secure loan approval. If a buyer is denied the loan to purchase the house within the specified period he/she can walk away from the purchase without any legal ramifications. If negotiated, a mortgage contingency can also allow the buyer to keep their earnest money deposit.
- Inspection Contingency (Due Diligence Contingency): This contingency gives the buyer the right to have the home inspected within a specified amount of time usually between 5 to 7 days. Like most contingencies, it protects the buyer based on the findings of a professional inspector. An inspector will examine the property thoroughly and report on the condition of the entire house. Depending on the home inspectors findings and the terms of the inspections contingency the buyer can choose to:
- Approve the report
- Disapprove the report, back out of the deal without penalty, get their earnest money back
- Request more time for a second look
- Request Repairs
- Negotiate down the price
If your house can not pass inspection it might mean you need to sell to a cash home buyer in Houston.
There are other contingencies that are less common but usually, the goal of a seller is to avoid contingencies so the sale of the house can go as smoothly and uneventful as possible.
Skip the stress of contingent offers
Like we stated above, a sale is not closed until its closed. This is commonly said because of how unpredictable real estate business dealings can be. Sell your house to Good Neighbor Home Buyers for a truly stress-free solution. Here at Good Neighbor we offer fast and close fast. We guarantee a fair cash offer for your Houston home in 24 hours or less and the best part is we do not need any contingencies to do it. Contact us at 281-713-3255 or fill out the form below and a licensed Good Neighbor agent will reach out to explain the process to get your offer.