My offer got accepted, but the house doesn’t show as “Pending” in the MLS. It shows as “Active-Contingent”. What does that mean?3/16/2022
When buyers win the bid on a home, they want the comfort of knowing the property is off the market and safely under contract without threat of another buyer swooping in. Imaging their anxiety when they find that the house appears to be active on the market? Today, we will explain what active-contingent means and why a property might remain at that status despite being under contract.
A contingency is defined by the Oxford Dictionary as “a provision for an unforeseen event or circumstance.” In real estate terms, a home inspection is an excellent example of a contingency. Most contracts state that the buyer has a right to have the property inspected and to terminate the sale if the inspection results are unsatisfactory to the buyer. Therefore, the sale is contingent upon the buyer accepting the results of the home inspection (a circumstance which cannot be foreseen until the inspection is completed).
Other common contingencies are financing, clear title, and appraisal. In essence, almost all real estate sales are contingent upon something and should be listed as active-contingent in the Multiple Listing Service (MLS) until all contingencies have been removed.
Then why are so many sales listed as “Pending” even when there are contingencies to be met and how do you determine when a sale is contingent and when it’s pending? While most MLS’s have rules that define each status, the choice on how to display a property is highly subjective and up to each individual real estate office to determine based on their interpretation of those rules. Basically, two properties in the same MLS might be under contract with the exact same contingencies and one will be listed as active-contingent and the other as pending.
You are at this point better informed, but not necessarily satisfied. So, let’s talk about what this distinction means to the buyer – nothing. When a seller has signed acceptance of a purchase contract that includes contingencies, they may not terminate that contract and take another offer as long as the contingencies are met without changes to the contract. In other words, as long as the home inspection goes well and the buyer does not ask for any repairs, price reductions or other changes to the contract, the seller must continue to fulfill their end of the contract and cannot move on to other buyers without committing breach of contract. So don’t worry about the status in the MLS. Your agent will guide you through removing your contingencies and will advise you as to the pros and cons of addressing concerns if they arise.
Remember, however, that your agent is not typically also a licensed attorney and cannot give you legal advice. As you move throughout the transaction, if at any time you are concerned that the seller is in breach of contract or you are concerned about your actions or their legal ramifications, you should consult an attorney.
Remember that most contingencies are built into the offer to protect the buyer from unforeseen issues and it is only fair that the seller be able to allow showings or take inquiries on the property until all of those contingencies have been removed. While they cannot accept another offer as long as the contract is progressing as agreed, they want to have the right to have other buyers on “backup” in case a contingency leads to a termination.
If you have any questions – call us. And remember: “We’ve done this a million times”