Difference Between Under Contract and Pending Explained

Let's break down the difference between under contract and pending in real estate. A listing can be marked as pending when an offer has been accepted by the seller, but the deal isn't yet finalized.

This is often because the buyer still needs to secure financing. In this case, the seller can still accept other offers until the pending deal falls through. The buyer has a certain amount of time to finalize their financing, typically 30 to 45 days.

The seller can still show the property to other potential buyers and accept a new offer during this time. This is why it's essential for buyers to understand the terms of the pending sale and plan accordingly.

Understanding the difference between pending and under contract can be confusing, especially for first-time homebuyers. A real estate contract typically includes contingencies and conditions that must be fulfilled for the transaction to proceed.

A property is considered 'under contract' when the seller accepts a buyer's offer and a legally binding contract has been signed. However, certain conditions, also known as contingencies, may still need to be fulfilled for the contract to proceed.

Active Under Contract status indicates that the transaction is progressing, and the buyer has actively taken steps to move toward closing. The buyer actively pursues the necessary steps to close the deal, such as inspections, financing arrangements, and fulfilling contingencies.

In the MLS, listing statuses are controlled by the listing agent, and 'Contingent', Pending', and 'Under Contract' are all variations of the same listing status. You may see terms online or even on real estate signs that say 'Sale Pending', 'Under Contract', or 'Backups Requested', all of which mean that the listing is 'Under Contract' with a buyer.

A property transitions to a 'pending' status once all the contingencies have been met and the contract is in its final stages. This indicates that the deal is close to completion and that all conditions have been satisfied.

As you navigate the real estate market, you may come across properties listed as "under contract" or "pending sale." The key difference between these two statuses lies in the level of certainty and the exact stage of the selling process.

A property listed as "under contract" indicates that an offer has been accepted and that both sides have to fulfill the conditions (contingencies) of the contract for the home purchase to take place. This stage comes after the seller has accepted an offer, and the property is generally no longer marketed.

The main difference between "under contract" and "pending sale" is that "pending sale" implies that the necessary steps and contingencies have been addressed, bringing the transaction closer to completion. In fact, all contingencies have been satisfied or waived in a pending sale.

Here's a comparison chart to help you understand the difference:

In summary, knowing whether a property is under contract or pending can guide your expectations regarding the availability and likelihood of a successful purchase.

Under vs Under Contract: What's the Difference?

The terms "under contract" and "pending" are often used interchangeably, but they have distinct meanings in the real estate market. "Under contract" indicates that an offer has been accepted and both sides have to fulfill the conditions (contingencies) of the contract for the home purchase to take place.

In the under-contract stage, contingencies and conditions are still being fulfilled. Inspections of the property and searches for title issues are conducted during this time.

The buyer has the contractual right to purchase the property if all conditions are met, and both sides are obligated to fulfill the terms of the contract. The property is generally no longer marketed, though "active under contract" status means other offers are still accepted.

Here's a comparison chart to illustrate the differences between under contract and pending sale:

The main difference lies in the level of certainty and the exact stage of the selling process. "Under contract" implies that the necessary steps and contingencies have been addressed, bringing the transaction closer to completion.

Similarities and differences between pending and under contract statuses are crucial for buyers and sellers to understand. Both statuses signify that a property has a buyer and seller agreement.

Under-contract and pending statuses share some similarities, but there's a key difference between contingent and pending sales. In both cases, there's a possibility that the transaction may not close.

A pending status implies that the transaction is in its final stages and close to closing. This is because all conditions have been fulfilled. On the other hand, under contract status could be at various stages of completion.

Here's a comparison of the two statuses:

In both cases, there's a possibility that the transaction may not close. However, it's less likely with pending status since all conditions have been fulfilled.

Active listings in MLS are simply that - they're active on the market and available for sale. They may have offers, but no contract.

A listing can be active under contract, which means it's been offered and accepted by a buyer, but the deal isn't yet finalized. This status is often referred to as "Under Contract" or "Active Under Contract."

In our market, 'Contingent', 'Pending', and 'Under Contract' are all variations of the same listing status.

In real estate, you'll often see listings labeled as "Active" or "Active Under Contract." An Active listing means the property is simply available for sale and has no offers or contract in place. This is the starting point, where buyers can submit their offers.

If a property is listed as Active Under Contract, it means there is an enforceable contract, and one or more contingencies are in place. This can be due to financing, inspections, appraisal, or other issues that need to be resolved.

You can still view an Active Under Contract property and submit a backup offer if you're interested. This way, you can stay in the running in case the primary buyer's contract falls through.

If you're considering making an offer on an Active Under Contract property, it's essential to understand the existing contingencies and assess the likelihood of the current purchase offer not closing.

Here are some key points to consider when making an offer on an Active Under Contract property:

Contingent listings on Zillow and Realtor.com can be confusing, but it's essential to understand what they mean. In North Carolina, a 'Contingent' listing simply means the property is under contract with a buyer. However, in the past, a contingent contract referred to a situation where the buyer still needed to sell another house in order to close on the home they are buying.

Zillow, Realtor.com, and other websites may use different terms to describe the status of a listing. For example, Zillow calls a listing "Contingent", while Realtor.com calls it "Contingent." Our website, on the other hand, makes a distinction between homes that are "Active Under Contract" or "Pending", depending on whether or not the home is still available for showings.

The key difference between "Active Under Contract" and "Pending" is that a property listed as "Active Under Contract" may still be shown to other interested buyers, while a property listed as "Pending" is no longer being shown.

Here's a breakdown of the common terms you may see online:

Keep in mind that all these terms mean the same thing: the property is under contract with a buyer. During this time, the seller is contractually obligated to the buyer, even if an additional higher offer is presented to the seller.

In the under-contract stage, negotiations and offers from other buyers are not entertained unless the initial agreement is terminated. This means that the seller is committed to the current buyer, and the primary focus is on fulfilling the agreed-upon conditions and contingencies.

A buyer can make a backup offer on a home that is under contract, but the seller may be less willing to re-negotiate repairs and other terms with the primary buyer. The seller may be in a better position to negotiate, as they already have one buyer and can't sell to the backup buyer unless the primary backs out.

Contingencies serve as safeguards for the buyer, enabling them to conduct thorough due diligence on the property. A financing contingency, for example, safeguards buyers who need to finalize a home loan, while an inspection contingency allows the buyer to have a professional inspection of the property and then decide whether to move forward with the purchase.

The most common contingencies in real estate contracts include financing, appraisal, inspection, and home sale contingencies. These contingencies can be included in the purchase contract to protect the buyer's interests and ensure a smooth transaction.

Here are some common types of contingencies in residential home sales:

A house is considered 'under contract' once the seller accepts the buyer's offer, indicating an agreement between the two parties.

The process of making an offer on a house is a crucial step in the home buying process, and it's essential to understand the terms of the transaction.

The buyer's offer includes the proposed price, contingencies, and desired terms of the transaction, which the seller can then accept, reject, or counter.

In essence, the buyer and seller are negotiating the terms of the sale, and it's a give-and-take process.

Contingencies and conditions are two crucial components of a real estate contract that can make or break a deal. Contingencies allow buyers to back out of the contract under specific circumstances, such as unsatisfactory home inspections or issues with financing.

The two most common contingencies in real estate contracts are inspections and a mortgage contingency. These contingencies safeguard the buyer's interests and give them an opportunity to renegotiate or walk away from the deal if necessary.

Conditions, on the other hand, outline specific actions or requirements that both parties must meet to move forward with the transaction. These conditions can include inspections, repairs, or other obligations that must be fulfilled before the sale can proceed.

In the under-contract stage, contingencies and conditions are still being fulfilled. This is the time when inspections of the property and searches for title issues are conducted. If problems arise, the buyer can negotiate repairs or credits and back out of the deal if necessary.

Here are some common types of contingencies in residential home sales:

The differences between contingencies and conditions can be subtle, but understanding them is crucial to navigating the real estate negotiation process. By knowing what to expect and how to respond, buyers and sellers can avoid costly mistakes and ensure a smooth transaction.

MLS listing statuses can be confusing, but understanding them is key to navigating the home buying or selling process.

Real estate listing statuses are controlled by the listing agent in the Multiple Listing Service (MLS), and the information is then fed to other real estate websites.

The MLS Statuses can vary, and sometimes other websites may use different terminology.

In our market, 'Contingent', 'Pending', and 'Under Contract' are all variations of the same listing status.

These terms mean that the listing is 'Under Contract' with a buyer, and the seller is contractually obligated to the buyer, even if an additional higher offer is presented.

During this time, the seller can't accept another offer without risking a lawsuit.

'Under Contract' listings can be broken down into 'Show' and 'No Show' listings, but some MLS systems may call this status 'Backups Requested.'

Show listings can still be shown for another buyer to make a backup offer.

If a listing is 'Under Contract', it's likely that the buyer is in the Due Diligence Period, which can be a good opportunity to inquire about the status of the deal.

Financing issues can arise during the pending and under-contract stage, causing delays or jeopardizing the transaction. This can be mitigated by staying close to lenders and having backup plans in place.

Inspection concerns can lead to renegotiations or the buyer withdrawing from the deal. Sellers should be prepared to address these concerns to keep the transaction on track.

Appraisal discrepancies can also cause issues, particularly if the property's appraised value is significantly lower than the agreed-upon price. This can make it difficult for the buyer to secure financing, and sellers should be prepared to negotiate if necessary.

Risks can be a major concern for both buyers and sellers during the pending and under-contract stage of a real estate transaction.

Financing issues are a significant risk, as buyers may struggle to secure financing, which can delay or jeopardize the transaction. This can be mitigated by staying close to lenders and having backup plans in place.

Inspection concerns are another risk, as discoveries during inspections can lead to renegotiations or the buyer withdrawing from the deal. Sellers should be prepared for such outcomes and open to addressing concerns to keep the transaction on track.

Appraisal discrepancies are also a risk, as a significantly lower appraised value than the agreed-upon price can make it difficult for the buyer to secure financing. Sellers should be aware of this possibility and prepared to negotiate if necessary.

Here are some common risks to be aware of during the pending and under-contract stage:

It's essential to understand the difference between pending and under contract in real estate sales. A basic understanding of listing statuses is crucial when buying or selling a property.

Under contract listings can sometimes be misleading, as they may not necessarily mean the sale is a done deal. In fact, a buyer can still back out of the contract, especially if they're unable to secure financing.

In many cases, a pending listing is a more accurate representation of the property's status. It indicates that the sale is progressing, but it's not yet finalized.

The author of the article, Bill Gassett, is a Nationally recognized leader in his field with over 37 years of experience in real estate.