Is Pending the Same as Under Contract?

Real estate listing statuses like “under contract” and “pending” are often confused, yet they represent distinct stages in the home buying and selling process. Understanding their differences is important for both buyers and sellers, as each indicates a different level of commitment and progression towards a finalized sale. This article clarifies these terms and their significance.

Understanding “Under Contract”

When a property is “under contract,” a seller has accepted an offer from a buyer. Both parties have agreed to the purchase price and general terms, and signed a legally binding purchase agreement. However, the sale is not yet final because it is contingent upon certain conditions. Buyers often submit an earnest money deposit, often ranging from 1% to 3% of the purchase price, to demonstrate commitment.

During this phase, several typical contingencies must be satisfied before the sale can proceed to closing. These often include a home inspection contingency, allowing the buyer to assess the property’s condition, usually within a period of 7 to 14 days after contract signing. An appraisal contingency is also standard, ensuring the property’s value as determined by an independent appraisal meets or exceeds the agreed-upon purchase price, which is vital for securing a mortgage. A financing contingency protects the buyer, allowing them to withdraw from the agreement without penalty if they are unable to secure a loan, a process that can take 30 to 45 days from contract acceptance to loan underwriting.

Understanding “Pending”

A “pending” status indicates a more advanced stage of the transaction. Most, if not all, of the agreed-upon contingencies have been satisfied or successfully removed. Significant hurdles, such as the home inspection, appraisal, and loan underwriting, have likely been cleared. The transaction is now progressing steadily towards its final closing date.

Once a property moves to “pending,” it suggests a higher probability of the sale completing. The buyer’s loan has typically moved past the conditional approval stage, and the title company is usually working on the final title commitment, ensuring a clear transfer of ownership. While unforeseen issues can still arise, the risk of the deal falling through at this stage is considerably lower than when it was “under contract.”

Key Distinctions and Implications

The primary distinction between “under contract” and “pending” lies in the status of contingencies and the overall certainty of the sale. “Under contract” means the agreement is subject to various conditions that still need to be fulfilled, introducing uncertainty. These conditions, such as a satisfactory home inspection or financing, represent potential points where the deal could be terminated without significant penalty.

“Pending” indicates that these conditions have largely been met, signifying a higher likelihood of the transaction closing. For other interested buyers, this difference translates into varying opportunities. A property “under contract” might still entertain backup offers, as the initial agreement could fail due to an unfulfilled contingency. A “pending” status typically means that backup offers are less likely to be considered, as the current transaction is on a firm path toward completion.

Navigating These Stages

For sellers, understanding these stages involves managing expectations and preparing for closing. When a property is “under contract,” sellers should anticipate the buyer’s completion of inspections and appraisals, and they may still consider backup offers if the primary deal encounters issues. As the status shifts to “pending,” sellers should focus on preparing necessary documentation for closing, such as deed transfers and final utility arrangements, knowing the sale is highly probable.

Buyers are actively involved during the “under contract” phase, completing their due diligence like home inspections and working with their lender to secure financing. Once the property is “pending,” their focus shifts to final loan approval and coordinating the closing. For other interested buyers, a property “under contract” may still present an opportunity to submit a backup offer, which could be accepted if the initial deal collapses due to unfulfilled contingencies or last-minute issues. While less common, a “pending” property could return to an active status if unforeseen problems, such as last-minute financing denial or significant title defects, prevent the closing, though this is rare.