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You’ve seen them everywhere and know the confusion all too well. Perhaps, you’re searching the MLS database and spot your dream home, only to see a “contingent” label next to it. Or, perhaps, you’re about to set up a home tour when you see the listing change to “temporarily off the market.” Real estate status remarks can leave you mystified and, in some cases, more confused than you already were.
But, believe it or not, there is a method behind the madness. Status remarks let real estate agents and homebuyers know exactly what step a home is in during a sale. And, given 97% of homebuyers used the internet to search for their home in 2020, those status remarks are more important than ever. But, of course, they’re only helpful when you understand what these labels actually represent.
So what do status remarks, such as active, contingent, etc., actually mean? We’ve talked with a real estate agent with decades of experience to break down the meaning behind these terms and how you can best use them in your homebuying process.
What’s the deal with real estate listing terms?
Like many industry experts have their own language to describe specific terms, so do real estate agents. Status remarks are simply terms used to describe the current situation (or status) of a listing and what’s going on with the property. Is it ready for offers? Has a seller already accepted an offer? Are they looking for backup buyers? These are all things you can learn by simply looking at the listing status. When used correctly, they are there to provide information, but they also save time and resources for everyone involved with the home search.
However, North Carolina real estate agent Diane Honeycutt, who has worked with 67% more single-family homes than the average agent in her area, emphasizes that not all regions will follow the same status remarks. MLS actually contains several different databases, so it’s not just one complete data bank that real estate agents everywhere use. For that reason, many agents have access to various portals, each of which might have its own unique terms. So that’s why you might find some conflicting terms in different regions of the country, Honeycutt says.
14 common real estate terms to know
With that said, there are several common terms that have similar use and meaning no matter where you are. Let’s take a look at those and find out when exactly you might see them during your home search.
An active home listing means the home is on the market and ready to receive offers. The sellers haven’t accepted any bids yet, and it’s available for showings and potential new buyers.
Active with contract (AWC)
This means a buyer already has a contract on the property, but the seller is still accepting offers. There might be some contingencies, such as a buyer financing or inspections, on the agreement that might cause the transaction to fall through. Thus, the sellers are keeping the home active on the market and accepting offers in order to have a backup waiting nearby. Active with contract is often seen with short sales, which may have a greater chance of going awry.
Under contract (UC)
A home listed under contract means the buyer and seller have agreed upon an offer and contract. However, the process isn’t over, and some terms of the contract are still unresolved.
This is essentially the same as an under-contract home, and the terms are used interchangeably in some regions. A contingent property has an agreed-upon contract between the buyer and seller, but there is at least one contingency, or stipulation, that needs to be met before moving toward closing. The contingency could be a home inspection, home appraisal, or the buyer’s financing, among other reasons.
For example, let’s say a buyer has an accepted offer on a home, but they put a home inspection contingency into the contract. The sale of the house is now dependent on receiving an inspection report that’s up to their satisfaction. So that property would be listed as contingent until the home inspection and any other contract terms are settled.
A home is technically still in the active stage when it’s contingent and can often still receive offers under certain conditions. We’ll get into that more later on.
Sale pending, deal pending, or just plain-old pending: It all signals the same thing in real estate terms. This means a home is under contract and all contingencies have been met. Now the buyer and seller are working toward closing. If you’ve ever heard someone say their home is “in escrow,” this is most likely the step they are referring to.
In our example above with the inspection contingency, the home would move into “pending” status when a home inspection is completed and the buyer found no issues of concern. They are now locked in the process since all terms and conditions in the contract have been met.
Pending, taking backups
This means the home is in the pending stage, but the sellers are still showing the house and taking backup offers in case the sale is terminated. However, the seller can only accept one of those backup offers if the deal falls through on its own. They aren’t allowed to drop the sale just because a better offer comes through at this stage.
Pending, subject to lender approval
Pending, subject to lender approval means the listing is pending, but the buyers are waiting to secure their financing. If they aren’t approved for their mortgage, the sale may fall through.
Pending, short sale
This means a short sale is pending between a buyer and seller. A short sale is when a seller sells the home for less than they owe on the mortgage, possibly to avoid foreclosure. In these situations, the seller’s bank must approve the transaction, which could take up to several months and perhaps fall through.
Coming soon (CS)
A home listed as coming soon is precisely as it sounds. It’s not yet active on the market but will be soon. According to Honeycutt, your agent can receive some information about the home, but they cannot show it yet.
A closed home means the property has made it through closing and is officially sold. The house is now in the hands of the new buyer.
Every seller has a “listing agreement” with their real estate agent that includes an expiration date. If that date passes and the home hasn’t been sold, the listing expires. The property is off the market at this point, but the homeowner may still be interested in selling the home with a new listing agreement or a new agent.
Temporarily off the market (TOM)
This is exactly as it sounds. A home may be taken temporarily off the market for many different reasons, including renovations, repairs, or even if the seller cannot show the property for some time.
Back on the market (BOM)
If a sale falls through or if a buyer pulls out, a home may make its way back on the market. A number of factors could lead to this. For example, the buyer couldn’t obtain financing, the home inspection came back with issues, or the buyer just got cold feet. It may be helpful to ask your real estate agent if they can discover why a potential sale fell through.
A home listed as withdrawn means it’s been taken off the market. Maybe the seller realized they didn’t want to sell, or perhaps they canceled the listing agreement for some reason. Either way, the home is no longer available and may not be for the foreseeable future.
A closer look at the contingent listing
Of all the status remarks available in the real estate world, the contingent listing might cause the most confusion. That’s because there are usually a few different levels to it.
As we mentioned before, a contingent listing is a home with an agreed-upon contract that has some type of contingency or term that needs to be met before closing. These are written into the contract when the offer is accepted. Then, the seller or buyer has a set amount of time to resolve them. So let’s take a deeper look at what those might be.
- Inspection contingency: Buyer requests a home inspection to ensure there are no major repairs or issues they’re unwilling to take on. If there are, they will be able to pull out of the contract based on the agreed-upon terms.
- Appraisal contingency: Many lenders require an appraisal on the home to ensure they aren’t loaning more than the house is actually worth. If the appraisal comes in lower than the purchase price or causes issues with financing, the buyers can back out. According to the National Association of Realtors’ May 2021 Confidence Index, appraisal issues accounted for 26% of closing delays, the most of any contingencies.
- Financing contingency: This specifies a home sale is contingent on the buyer obtaining financing and securing a mortgage loan. A financing contingency is fairly common, especially since 87% of buyers financed their home purchase in 2020.
- Home sale contingency: This means the home’s purchase depends on the buyer selling their previous home first. This is usually because the buyer will use the funds from their own home sale to complete their purchase.
Now that we’ve sorted that out, we should point out that not all contingent listings are the same. There may be additional terms alongside the contingency label that give a little more detail about the contract terms.
Note: If you’re just browsing real estate websites, you won’t see these everywhere. However, they might make an appearance on your sale contract or in the MLS database, so they are good to know. Plus, they will give you more information on whether a contingent home is worth pursuing, which we will cover later.
- Contingent — continue to show (CCS): The home is under contract with contingencies, but the seller is still willing to accept offers and show the house. The seller might be looking for an offer with fewer contingencies or think their current contract might fall through.
- Contingent — no show: The buyer and seller have an agreed-upon contract with contingencies, but it’s pretty solid. There’s no reason for backup offers, and the deal is likely to get finalized.
- Contingent, with bump/kick-out: The home is contingent, but a “kick-out” clause in the contract allows the seller to bump the current buyer for a better offer. In this situation, the seller has to give the current buyer a period (usually 24 to 72 hours) to drop their contingencies, or the seller can accept the better offer.
- Contingent, with no bump/kick-out: This is the exact opposite as above. The seller cannot kick out or bump the current buyer in favor of a better offer. Both the buyer and seller still have to complete their required contingencies, however.
- Short sale contingent: This is when a short sale has a contingent contract. The deal is contingent on all parties completing the terms of the short sale, including bank approval.
- Contingent with probate: When a homeowner dies, the house will most likely be sold in probate, especially if there are outstanding debts or if the property wasn’t left to anyone. Probate refers to legal proceedings where the will of the deceased is proven valid and all property is distributed. A contingent with probate home is dependent on all the legal proceedings following through without issue.
Can you still make an offer on a contingent home?
Unless the contract on the home specifically prohibits it, you are allowed to submit an offer on a contingent home. But is it worth it? Honeycutt, our North Carolina real estate agent, believes there are two ways to look at that situation.
First, if you are extremely interested in a home already under contract or contingent, it might be smart to submit an offer and be the first person the sellers have in mind in case of any issues. That’s especially true if you believe the current sale is likely to fall through or if you’re seeing a lot of transactions going awry in your area, Honeycutt says.
“So if you really love the home and you really want it, your best way to have a chance to get it is to be that primary backup,” she says.
However, Honeycutt cautions pursuing a contingent home might only lead to heartbreak and stress. Suppose you fall in love with a house and submit your best offer. If the current sale goes through, you might be devastated and compare all future homes to that one. Ask your agent if they can discover if a deal is solid and unlikely to be terminated for any reason. In that case, it may not be best to put your energy, resources, and valuable time into a home, especially if there are other properties you could miss.
In essence, Honeycutt says, it comes down to how much of an “emotional ride” you’re willing to take on. If you don’t care about any potential heartbreak, it doesn’t hurt to submit an offer and become that primary backup. But if it’s going to lead to more stress in an already stressful process, it might be best to hold off.
Three ways your agent can help you navigate real estate listing terms
If you have any confusion surrounding status remarks, it’s best to turn to your top buyer agent. They will be your best resource in understanding these terms and learning how they may affect you.
They can educate you
The No. 1 way an agent can be helpful is by educating you on the exact meaning of the terms and the reality behind them. The status listings are what they are, and your agent can’t change them, Honeycutt says. But they can break down not only what a listing means but also what it means in the context of your home search.
Plus, real estate agents can find out the truth behind many listings. They have resources to discover what contingencies are on a home or why a home sale has been pending for months. MLS listings aren’t always up to date, but your agent should be able to give you accurate information.
They can guide you
Honeycutt says there aren’t a lot of yes or no answers in the real estate world. Every home search is unique, and your path to a new home will depend on your situation and surroundings. That’s where your agent comes in. They can guide you through the unique challenges you face. For example, they can strategize the best way to approach an offer on a contingent home or advise you on if it’s wise to pursue one of these homes at all.
They can set your expectations
Any home search can be stressful, but if you’re going after a home that’s either under contract or pending, it can add confusion. Honeycutt says your agent should help with the emotional toll you may encounter when navigating these homes. They can set your expectations on how the process may play out, what happens if the seller accepts your backup offer, and what happens if the current contract makes it to closing. In short, she says your agent should prepare you for any situation.
With an expert on your side, you should be able to understand what status remarks such as active, contingent, etc. mean and navigate them with ease. So, hopefully, these listing terms can act as a blessing in the future.
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