What Is the Difference Between Under Contract and Pending?

The real estate market uses various terms to describe a property’s status. Terms like “under contract” and “pending” can be confusing. While both indicate an accepted offer, they represent different stages in the home buying process, with unique implications for a transaction’s progression and likelihood of completion. Understanding these nuances helps gauge a property’s availability and the stability of a potential deal.

Understanding Under Contract

When a property is marked “under contract,” a seller has formally accepted a buyer’s offer, and both parties have signed a purchase agreement. This agreement typically includes specific conditions, known as contingencies, that must be satisfied before the sale can finalize. These contingencies protect both parties. During this phase, the property is not yet sold, and the deal can still fall through if these conditions are not fulfilled.

Common contingencies include:

• Home inspection contingency: Allows the buyer to assess the property’s condition and negotiate repairs or a price reduction.
• Appraisal contingency: Ensures the property’s value, as determined by an independent appraiser, meets or exceeds the purchase price. Lenders often require this.
• Financing contingency: Gives the buyer a specified period to secure mortgage approval. If financing fails, the buyer can withdraw without forfeiting their earnest money deposit, a good faith payment held in escrow.
• Title contingency: Allows the buyer to review the property’s legal history and ensure there are no undisclosed liens or ownership disputes.
• Home sale contingency: Makes the purchase dependent on the buyer selling their current property.

While under contract, some sellers may accept backup offers, especially if initial contingencies introduce uncertainty.

Understanding Pending

A property listed as “pending” indicates a more advanced stage of the real estate transaction, meaning most contractual contingencies have been satisfied or removed. This status implies a higher likelihood that the sale will proceed to closing. At this point, the buyer has secured financing, the property has passed inspection and appraisal, and the title search has cleared any potential issues. The transaction is moving steadily towards the final transfer of ownership and funds.

While a pending status suggests a near-certain sale, it does not mean the deal is entirely final. Unforeseen circumstances, though less common than in the “under contract” phase, can still arise. For instance, a buyer’s financial situation could change unexpectedly, such as a job loss impacting loan approval, or a last-minute issue with the property’s condition could emerge during a final walkthrough.

Interpreting Statuses and Regional Differences

The core distinction between “under contract” and “pending” lies in the progression of the transaction and the remaining conditions. An “under contract” property is subject to various contingencies (e.g., inspection, appraisal, financing). These contingencies represent potential risks that, if not met, could allow either party to withdraw, often with the return of the earnest money deposit. This stage carries a higher degree of uncertainty.

Conversely, a “pending” status indicates that these contingencies have largely been cleared, and the transaction is nearing its final stages. Financial commitments are more solidified, with loan underwriting often complete. While a pending sale is significantly more likely to close, it is not entirely guaranteed until the deed is recorded and funds are disbursed. The probability of a deal falling through is considerably lower.

It is important to recognize that the precise definitions and usage of “under contract” and “pending” can vary significantly across different Multiple Listing Services (MLS) systems and geographical regions. Some local real estate markets may use these terms interchangeably, or they might have unique sub-statuses that further refine the property’s position in the sales pipeline. For example, some MLS systems may include statuses like “Active Under Contract” or “Pending with Contingencies” to provide more granular detail, indicating that while an offer is accepted, certain conditions still need resolution. These regional variations underscore the importance of local expertise in interpreting listing statuses. Therefore, the most reliable way to understand the true status of a specific property and its implications for financial planning and potential offers is to consult directly with a local real estate agent. Their knowledge of local practices and MLS rules can provide accurate and actionable insights for buyers and sellers.