With the unprecedented number of real estate transactions of late, I seem to be getting the same question quite a bit; what does contingent mean? If it says “Continue to Show”, should we look at it? What is the/a contingency?
First, let’s get “contingency” out of the way. I’m not pulling this out of the dictionary, but in my line of work a contingency usually means that there is an event that needs to take place before the contract can move forward, and provides an opportunity for a Buyer to withdraw from a contract without ramification. Common examples of contingencies include a buyer who has a contingency to obtain financing, or a buyer who has a contingency to complete a home inspection or a due diligence period. Contingencies can also include circumstances where a buyer needs to sell a property before they can close on the subject property, but this is rare in markets that are as busy as ours has been. The reason this is less common is because sellers in hot markets are less inclined to accept major contingencies beyond the common ones I mentioned above.
At the time of this article, there are 3 classifications of properties that are under contract, or in other words, have an accepted offer with another party. These classifications are for the Teton MLS, note that other areas and real estate associations label contingencies or classify properties with an accepted contract differently.
If a property is labeled as “Pending” it usually means that the seller has accepted an offer that has no contingencies. It might be referred to as “Pending”, “Accepted Offer” or “Under Contract” when speaking with an agent. Certain Real Estate websites may also label listings this way.
2) Pending, Contingent
A listing that is labeled as “Pending, Contingent” normally means that there is an accepted offer, but there is some sort of contingency in place. Usually these are common contingencies such as an inspection period or financing as mentioned above. Similar to “Pending” listings, these types of listings are often referred to as “Pending”, “Accepted Offer” or “Under Contract”.
3) Pending, Continue to Show
Properties that are labeled “Pending, Continue to Show” usually indicate that there is a more substantial contingency like an extended inspection period, the Buyer needs to sell a home before closing, or another form of unusual contingency. There’s a caveat to this, it’s common in Jackson for agents to use this label more generally, even if there is not a significant or unusual contingency. Some websites May identify these types of listings as “Continue to Show, but they’re usually just classified as “Pending Contingent” or “Contingent” like other listings that have an accepted offer.
As a final note, agents often don’t change the status of a listing as contingencies are removed. Listings that are under contract and identified as contingent or mention that the property should continue to be shown may not have contingencies at all and the listing classification simply hasn’t been updated. In addition, it may or may not be fruitful to inquire about a listing that is under contract, but it never hurts to ask. It’s easy to follow up with your agent to obtain the status of the contract to see if it’s something that might be coming back to the market or have a contract that is on shaky ground.