What is the difference between Contingent and Pending? Well – technically both these descriptions refer to properties that are “in escrow.” In Escrow refers to a property that is under contract. Typically the first 17 days of the contract are “contingent” days – contingent on inspections of the property, review of disclosures, appraisal and financing approval, to name a few.
So does the listing agent put the property into a “contingent” or “pending” status in the MLS? Agents are required by their Board of Realtors to enter “active” listings into one of these categories after a contract is accepted between the buyer and seller. Realtors actually have other choices as well – Back Up Offers, First Right of Refusal (this one is new.) The two most common are Contingent and/or Pending. If the contract seems pretty “solid” right off the bat there is not much of a decision – it goes into Pending. Technically a contingent entry is still considered a property to be “available for showing” by realtors. One good reason for a contingent status: the seller accepted a “contingent on the sale of buyers’ property” contract. This is typically the reason to put a property into the Contingent Status. The Board of Realtors considers the Contingent status as one that is still “active” and continues the Days on Market (DOM) Clock still counting. Many agents don’t know this and put properties into Contingent Status for no real reason – not because they accepted a “contingent offer.” Only the Pending status stops the DOM clock from counting! If a property is in Contingent Status the Days Under Contract are included in the “market time.”
This creates a problem for agents who may be checking comps for properties and using DOM as a statistic…..often if a property is entered in Contingent Status, agents never take it out of that status and the clock ticks on the entire time it’s under contract and it would then appear that is sat on the market for much longer than it really did. Laura and I for one would like for all agents to know this is how it works and start to use the Pending status if a property is in escrow. We all know that no one shows contingent status properties. Maybe you occasionally get a phone call from another agent curious if the escrow is strong or now…but if they want to know they will call on and status.
Let’s all put properties into Pending from now on unless an escrow truly is contingent on the sale of a buyer’s property. (Especially when this really doesn’t happen that often anyway.) That way we can all really know how long a property was really on the market – our DOM can become more accurate that way!