“Pending” Vs. “Under Contract” in Real Estate: What You Need to Know
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Whether you are buying or selling a property, it is important to have an understanding of what Pending and Under Contract statuses mean. These contract statuses, found in the real estate industry, provide more details about where the property is in the sales journey.
Join us in our article to learn more about a property agreement’s different stages and what they mean.
Difference Between “Pending” and “Under Contract” Statuses
“Pending” and “Under Contract” in real estate are the stages found in a sales journey. Their purpose is to inform buyers and sellers about the property on sale. Let’s take a look at the key differences between Pending and under-contract statuses.
What Does “Under Contract” Mean in Real Estate?
A simple “Under Contract” meaning is that there is a contract between a seller and buyer of a property. In this contract, the seller has agreed to a purchase offer from a buyer. Both parties would have signed this contract and agreed to the terms of sale listed in the agreement.
It’s important to note that the Under Contract stage does not include the sale closure. This stage can often have requirements that still need to be met before the sale of the property is finalized. Some conditions that could be Pending in the Under Contract stage can include:
The buyer will be happy to learn that during this phase, the property status is set to Under Contract in sales listings. This status also indicates that the property is off the market and will not accept any other purchase offers from potential buyers.
“Pending Sale” meaning in Real Estate
On the other hand, Pending is the stage that the agreement enters when the buyer and seller meet all the conditions listed in the Under Contract phase. The Pending Sale stage of the purchase agreement lets all parties know that the property is in the last phase of being sold. Key points to remember in the “house – sale Pending” phase are that:
Under Contract vs Pending: A Comparison
If you are purchasing a property, you might want to weigh the differences between the “Under Contract” and “Pending” stages of your contract. Today, we provide a table describing the Pending offer vs. Under Contract stages of a sales agreement in real estate. Take a look below:
| Under Contract | Pending Contract | |
|---|---|---|
| Buyer has accepted offer to purchase property. |  | |
| Property is in a sales process. | | |
| Conditions met in the sales agreement. |  | |
| Sale of property has been finalized. | | |
| Property is off the market. | | |
Contract
To be clear, the Under Contract and Pending Contract stages refer to the same sales agreement. These stages just occur at different times of the contract’s lifecycle journey. The Under Contract and Pending statuses are often used interchangeably in real estate, but they are indeed different terms. To help you clear up the confusion, we have provided further explanations below.
Sale Status
When it comes to the sales status of a property, the Under Contract and Pending stages let us know that a buyer has placed an offer on the building. However, these phases do have small differences. For example, in the Under Contract status, even though the seller has agreed to the buyer’s offer, there are still some conditions that need to be met for the purchase to be finalized. Meanwhile, with the Pending status, all the requirements in the sales agreement have been met, and both parties are just waiting for the sale to be completed.
Active Under Contract Vs. Pending
Another term comparison that our readers in the real estate industry want to know more about is “Pending” vs. “Active Under Contract.” These terms are also used to identify the status of a property along its sales journey. Under both circumstances, the property does have an offer to purchase from a buyer, but there are some differences to pay attention to.
For example, in the Active Under Contract phase, the property can still be listed on the market. This status also tells us that the seller has accepted an offer to purchase their property but is still in the process of managing contingencies.
As we learned in our previous comparison, the Pending status of a property agreement means that the building is no longer listed in the market and is in the final stage of its sales process.
Serving other Important Components of a Contract to Purchase Property
Now that we have covered the essential stages in a contract’s lifecycle, it’s time to take a look at some noteworthy topics regarding purchasing or selling a property.
Buyer’s Rights
A popular term in real estate is buyer’s rights. It’s used to explain the protection that a buyer has in a contract that was designed to purchase residential or commercial property. The buyer’s rights listed in a contract depend on the region in which the building is sold. Here are some popular examples of a buyer’s rights found in a contract, whether in a Pending or Under Contract status:
Obligations for Both Sides in a Contract
Buyers and sellers both have duties in a sales process that are listed in a property agreement. By signing the contract, the buyer and the seller agree to the unique obligations that they are responsible for. You will also find legal obligations in a contract. These commitments are compulsory and will follow the rules and regulations of the country and legal system in which the property is being sold.
To give you an idea of an example, a seller of a property is obligated to reveal all the flaws of the building. These defects can be presented as a history of ongoing maintenance, repairs, and renovations.
On the other hand, a common buyer obligation is to commit to making payment. The buyer will have to transfer the money they agreed to pay for the property to the seller. In the contract, the buyer will be given a set timeline and terms to meet this payment obligation.
Contingencies
As we explained earlier, contingencies are placed in property agreements to indicate that conditions must be met before a sale can be completed.
Contracts have contingencies to protect the buyer and the seller in the property agreement. They allow parties to terminate the agreement if one of them breaches the contract by not meeting a specific requirement.
A common contingency found in property agreements is the home inspection requirement. This contingency gives the buyer the power to scan the house for any issues. If there are any problems found during the inspection, the buyer can ask the seller to repair the damages or request a lower price on the deal.
Market Availability
In a property agreement, you will also find the term “market availability.”
It displays the property’s availability status in a market, such as ready to purchase or rent.
Under the market availability section, other points can be mentioned, such as:
Time Period
Many dates and timelines are added to property agreements. For example, with a rental agreement, the contract will define the lease terms. This means the contract will include the date range for which the tenant can occupy the building. Many landlords choose to give tenants monthly or annual leases for occupation.
Another super important time-based condition found in property agreements are payment schedules. They are essential to getting all parties on the same page regarding when payments are due. Most rental agreements accept fees paid on a monthly basis, whereas a property sale can have payments covered over a few months or in one go.
Backup Offers
When you place an offer to purchase a property, there could be backup offers in the mix. These offers are proposals from other buyers who are also interested in the property.
From a seller’s perspective, backup offers are a great way to feel confident in selling their property. This is because it gives them a second chance to sell the property if the original deal fails.
Contingent Under Contract
Another important term to understand in real estate is “Contingent Under Contract. “ When you hear an agent use contingent in real estate, they mean that a property has an offer accepted by the seller, but there are still some requirements that need to be met to conclude the sale, such as:
Noncontingent Under Contract
Since we discussed Contingent Under Contract, we should also address the Noncontingent Under Contract term. If you come across this phrase in real estate, it means that the contract is in a stage that describes the property is in a sales process. Furthermore, the buyer has reviewed the contract to remove the conditions to finalize the sale.
Frequently Asked Questions
How long can a house be Under Contract?
There are various points that determine how long a residence remains in a contract. The first place to find your answer is to check the property agreement.
The contract will list terms and conditions agreed by the buyer and seller of the house, so it’s a good place to check for dates. Other factors that could affect how long a dwelling continues to be Under Contract are country laws, real estate laws, and the current market regulations.
Generally, though, a property agreement for selling a house has a 30-60 day time period.
Can a property be Under Contract and still accept backup offers?
Yes.
What are examples of contingencies?
In the real estate business, examples of contingencies include financing and appraising.
A financing contingency is added to the property agreement and gives the buyer some time to seek funding for purchasing the home. The amount of time allocated to the financing contingency depends on what is agreed upon in the contract. If the buyer does not find enough money to purchase the house within the timeframe allocated in the contract, they can withdraw their offer.
An appraising contingency gives a buyer the power to evaluate the true value of the property to see if it matches up to the purchase price. If the home appraisal figure is lower than the purchase price, the buyer and seller can renegotiate the price, or the buyer can withdraw their offer entirely.
Can I Make a Formal Offer on a Sale Pending or Under Contract?
Buyers can make a formal offer on any home that is listed. It does not matter if the property status falls under Sales Pending or Under Contract.
However, whether the seller accepts or considers the offer will depend on the contract’s status and obligations. The seller’s preferences will also come into play.
How long does the Pending stage last?
In the real estate industry, it’s difficult to predict the Pending stage of a property. Factors like market conditions and how the sale transaction will be processed all play a role in speeding up or slowing down the Pending stage.
If the terms of the contract can be met quickly, the Pending stage can last for just a few days. However, if there are outstanding contingencies, the Pending stage could take a few weeks.
“Under Contract” and “Pending Sale” Stages Streamlined with Document Generation
Thanks for reading our article about contracts found in the real estate industry. We covered many topics and terms found in these documents that are essential to tracking and monitoring sales.
If you would like a no-code option to create and generate contracts fast from Salesforce, we recommend Titan. Our contract lifecycle management and document generation software can automate any process, like managing contracts through a sales cycle. Titan’s platform is trusted by giants in the industry and offers end-to-end security for your data. Our documents are secure and compliant with HIPAA, SOC 2, ISO, GDPR, and other leading frameworks to protect your confidential data.
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