What Is The Difference Between Pending And Under Contract

While buying or selling a home, one may come across the terms ‘pending’ and ‘under contract.’ For those who are not familiar with the real estate industry, these terms may seem interchangeable. However, they have …

What Is The Difference Between Pending And Under Contract

While buying or selling a home, one may come across the terms ‘pending’ and ‘under contract.’

For those who are not familiar with the real estate industry, these terms may seem interchangeable. However, they have distinct meanings and implications that can impact the outcome of a transaction.

Some may believe that ‘pending’ and ‘under contract’ are interchangeable terms. However, this assumption can lead to confusion and misunderstandings during the buying or selling process.

It is important to understand the differences between these terms to navigate the real estate market with confidence. By delving into the nuances of these terms, buyers and sellers can gain a better understanding of the status of a property and make informed decisions.

Key Takeaways

  • ‘Pending’ means that an offer has been accepted and the sale is in the final stages of completion, while ‘under contract’ means that the seller has accepted the buyer’s offer and is legally bound to sell the property.
  • During the ‘pending’ period, the property is no longer available for showings or offers from potential buyers, while during the ‘under contract’ period, the property is taken off the market, and other potential buyers are not able to make an offer.
  • A pending status doesn’t necessarily mean that the sale is guaranteed to go through, while the sale of a property that is ‘under contract’ is legally binding and cannot be terminated without consequences.
  • Buyers who know that a property is ‘under contract’ may be less likely to waste time and resources making an offer on a property that is not available, while sellers who are aware of the distinction between ‘pending’ and ‘under contract’ can better manage their negotiations and expectations.

What Does Pending Mean in Real Estate?

When a property is pending in real estate, it means that an offer has been accepted and the sale is in the final stages of completion. This is the time when the buyer and seller are finalizing the details of the transaction, such as inspections, appraisals, and financing.

During this period, the property is no longer available for showings or offers from potential buyers. The pending status is an exciting time for both the buyer and seller, as it means that they are close to closing the deal.

However, it’s important to note that a pending status doesn’t necessarily mean that the sale is guaranteed to go through. There are still some potential hurdles that could arise before the transaction is completed.

With that said, let’s now move on to explore the meaning of under contract in real estate.

The Meaning of Under Contract in Real Estate

If you’ve found a house you love and your offer’s been accepted, congratulations! You’re officially in the process of finalizing the sale, and the property is now considered ‘under contract’.

This means that the seller has accepted your offer and is legally bound to sell the property to you, provided you meet all the conditions outlined in the contract.

Being under contract is an important milestone in the home buying process, and it typically involves a number of steps, including inspections, appraisals, and financing. During this time, the property is taken off the market, and other potential buyers are not able to make an offer.

It’s important to note that while the property is under contract, it’s not yet considered sold. There are still a few key differences between pending and under contract that buyers should be aware of before proceeding with a home purchase.

Key factors to consider when a property is under contract:

  • The sale of the property is legally binding and cannot be terminated without consequences.
  • The property is taken off the market, and other buyers cannot make an offer.
  • The buyer typically has a set amount of time to complete inspections, appraisals, and financing.
  • The seller may not be able to accept any backup offers during this time.

Now that we have a better understanding of what it means to be under contract in real estate, let’s take a closer look at the key differences between pending and under contract.

Key Differences Between Pending and Under Contract

As a home buyer, you’ll want to know the contrasting aspects of a property that’s currently pending versus one that’s under contract. While both terms indicate that a buyer has made an offer on a property and the seller has accepted it, there are some key differences that can affect the outcome of the sale.

A property that’s under contract means that the buyer and seller have signed a contract and are in the process of fulfilling the terms of the agreement. This includes inspections, appraisals, and any contingencies that may be included in the contract. Once all of these conditions are met, the sale will be finalized and the property will be sold.

On the other hand, a property that’s pending means that the seller has accepted an offer from a buyer, but the sale hasn’t been finalized yet. This could be because the buyer is waiting for financing to be approved or for inspections to be completed.

Understanding these terms is important for both buyers and sellers, as it can affect the timeline and outcome of the sale.

Why Understanding These Terms Matters for Buyers and Sellers

It’s crucial for both buyers and sellers to grasp the significance of the terms ‘pending’ and ‘under contract,’ as they can have a significant impact on the outcome and timeline of a property sale. Here are some reasons why understanding these terms matters:

  • Knowing the difference between ‘pending’ and ‘under contract’ can help buyers and sellers to manage their expectations. For instance, a property that is ‘under contract’ means that a buyer has made an offer, and the seller has accepted it, but the sale has not yet closed.
  • On the other hand, a property that is ‘pending’ means that the sale is in its final stages, and is awaiting closure.
  • Understanding these terms can also help buyers and sellers to navigate the real estate market more confidently. For example, buyers who know that a property is ‘under contract’ may be less likely to waste time and resources making an offer on a property that is not available.
  • Similarly, sellers who are aware of the distinction between ‘pending’ and ‘under contract’ can better manage their negotiations and expectations.

By understanding these terms, buyers and sellers can navigate real estate transactions more confidently. In the next section, we’ll explore some tips and strategies for doing just that.

Navigating Real Estate Transactions with Confidence

Ready to confidently navigate real estate transactions? Let’s explore some tips and strategies to help you feel more at ease.

First, it’s important to have a clear understanding of the terms used in real estate transactions, such as ‘pending’ and ‘under contract.’ Knowing the difference between these terms can help you better negotiate and make informed decisions.

Another way to navigate real estate transactions with confidence is to work with a knowledgeable and trustworthy real estate agent. An experienced agent can help guide you through the process, answer any questions you may have, and provide valuable insights into the local market.

Additionally, it’s important to do your own research and be proactive in your communication with all parties involved in the transaction. By staying informed and actively participating in the process, you can help ensure a smooth and successful real estate transaction.

Frequently Asked Questions

Can a property be both pending and under contract at the same time?

Yes, a property can be both pending and under contract at the same time. Pending means the seller has accepted an offer and the buyer is performing their due diligence, while under contract means the buyer has committed to purchasing the property.

What happens if a property goes from under contract back to pending?

If a property goes from under contract back to pending, it means that the deal fell through and the property is back on the market. This can happen due to various reasons, such as financing issues or inspection problems.

How long does a property typically stay in the pending or under contract status?

Properties typically stay under contract for 30-45 days, while pending status lasts around 30 days. The length of time depends on the contract terms and contingencies. Buyers and sellers should communicate regularly with their agents to stay informed.

Can a buyer still make an offer on a property that is under contract or pending?

A buyer can still make an offer on a property under contract or pending, but it may not be accepted or considered. It’s important to work with a knowledgeable agent who can advise on the best approach.

How does a property’s status affect the negotiation process for buyers and sellers?

A property’s status affects the negotiation process for buyers and sellers. An under-contract property means the seller has accepted an offer, and negotiations are closed. A pending property means negotiations are ongoing, and offers can still be made.

Conclusion

In conclusion, understanding the difference between pending and under contract is crucial for both buyers and sellers in the real estate industry. While both terms indicate that a property is in the process of being sold, there are key differences that can impact the transaction.

For buyers, knowing whether a property is pending or under contract can help them determine if it’s still worth pursuing and making an offer on. For sellers, understanding these terms can help them better communicate with potential buyers and manage their expectations.

According to data from the National Association of Realtors, the average time a home spends on the market before going under contract is 18 days. This highlights the importance of acting quickly when a desirable property comes on the market and being prepared to make an offer.

By understanding the nuances of the real estate industry, buyers and sellers can navigate transactions with confidence and achieve their goals.

Leave a Comment