When Does a House Go From Pending to Under Contract?

Navigating the real estate market involves various listing statuses. Understanding these terms is important for anyone involved in a property transaction, as they indicate different stages of the sale process. Misinterpreting a property’s status can lead to missed opportunities or misunderstandings. Clarifying these distinctions helps manage expectations and provides a clearer roadmap for buying or selling a home.

Understanding Real Estate Listing Statuses

A property’s journey through the market involves several distinct listing statuses. Initially, a home is “Active,” meaning it is available for showings and accepting offers. As offers come in, the status shifts, indicating a potential sale is in motion. This progression leads to statuses like “Under Contract” or “Pending,” which signify significant transaction milestones. Ultimately, a property moves to “Sold” once ownership transfer is complete.

Defining “Under Contract”

A property listed as “Under Contract” signifies a seller has accepted a buyer’s offer. At this stage, a legally binding purchase agreement has been executed, but the transaction is not yet final. The agreement typically includes various conditions, known as contingencies, that must be satisfied before closing. Common contingencies involve the buyer securing financing, a satisfactory home inspection, and the property appraising at or above the agreed-upon price. The deal’s continuation depends on these conditions being met by outlined deadlines.

If any contingencies are not fulfilled, the contract may be terminated without penalty, allowing the buyer to withdraw their offer. This status provides a period for both parties to complete due diligence and ensure all prerequisites for the sale are in order. It represents a commitment from both sides, with safeguards to protect their interests until all conditions are cleared.

Defining “Pending”

The “Pending” status indicates a more advanced stage of the transaction compared to “Under Contract.” While “Pending” is a type of “Under Contract” status, it means most major contingencies have been met or waived. This signifies a higher likelihood that the sale will proceed to closing without significant issues. For example, if financing is approved, the home inspection completed, and the appraisal met the value, the status might update to pending.

A property does not transition “from pending to under contract”; instead, it moves from “under contract” (with active contingencies) to “pending” as those contingencies are cleared. Some Multiple Listing Service (MLS) systems might use “Pending” as the initial status immediately after an offer acceptance, encompassing the entire conditional period. This status suggests the transaction is progressing smoothly and is nearing finalization, with fewer hurdles remaining before ownership transfer.

Key Activities After an Offer is Accepted

Once a home is under contract, several activities unfold to move the transaction toward closing. A home inspection is among the first steps, where a professional evaluates the property’s condition. This inspection costs between $300 and $500 and takes two to four hours to complete, with the report delivered within a few days. Buyers use this report to negotiate repairs or credits with the seller.

Following the inspection, an appraisal is conducted, especially if the buyer is obtaining a mortgage. This assessment determines the property’s fair market value for the lender’s assurance. An appraisal costs between $300 and $550 and takes one to two weeks. Simultaneously, the buyer’s loan undergoes underwriting, a process where the lender verifies income, assets, and creditworthiness, which can take 30 to 60 days.

A title search is performed by a title company or attorney to confirm legal ownership and uncover any liens or claims against the property. This ensures a clear title can be transferred and involves setting up an escrow account, managed by a neutral third party, to hold funds and documents until all conditions are met. Finally, a pre-closing final walkthrough is conducted a day or two before closing, to ensure the property is in the agreed-upon condition and any negotiated repairs have been completed. Both buyers and sellers incur closing costs, which range from 2% to 5% of the purchase price for buyers and 6% to 10% for sellers.