One of the most commonly asked questions I get from people just starting the home buying process is "What does contingent in the status of a listing mean?" What buyers need to understand is that there is a difference between the active and contingent statuses. When a listing is active the seller is actively looking for offers. There are no accepted offers on the property and the property is still available.
The contingent status is a relatively new status that was created in response to the increase in the number of short sales. Short sales have an additional step in the negotiation process. They require the short sale lender to approve the sale and the offer in order to move forward. There is a period of time when the buyer and seller have agreed to terms and the file is sent to the short sale lender for their approval. During this time the property moves into contingent status. When you see contingent it means the seller has accepted an offer on the property and they are waiting for the bank to approve, counter or reject the offer.
The contingent status is meant to alert agents and buyers that there are offers on the property and one offer has been has been accepted by the seller and submitted to the short sale lender for review. Before there was a contingent status, buyers and their agents were viewing and submitting offers on these short sales not knowing that there was already an accepted offer. This was very frustrating. The property will stay in the contingent status until the short sale lender makes a decision. If the lender accepts the offer, the property will then move into a pending status (in escrow). If the short sale lender does not accept the offer or through negotiations an agreement can not be reached, the property will move back into the active status.
I hope this helps. Do you have any other questions? Feel free to let me know if you do. I am here to help.
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