House Under Contract vs Pending: What’s the Difference?

House Under Contract vs Pending

Real estate jargon can be a headache. Buyers and sellers face a mountain of terms. It’s tough to get the hang of it, especially when you’re in a rush to sell your home. It’s time to clear up a couple of these terms.

Buyers often ask us about “under contract” and “pending.” These words pop up a lot when homes are for sale. They can be confusing. Different websites, states, and markets use them in their own ways.

We aim to clarify the confusion. “Under contract” and “pending” both indicate a home is in the process of being sold, yet they are not identical. Each term represents a different stage in the sale process.

House Under Contract vs Pending Infographic

How do Real Estate Transactions Work?

Real Estate Transaction

Buying a home involves several steps. Here they are, simply put:

  • A potential buyer finds a property.
  • They submit a formal offer.
  • The buyer and seller negotiate the price and closing timeline.
  • The seller agrees to the terms.
  • Both parties sign a contract, usually with conditions like financing approval and property evaluation.
  • The buyer deposits earnest money into an escrow account.
  • The buyer works on securing a mortgage.
  • The property is inspected and appraised.
  • The transaction is completed.

What About Multiple Listing Service?

Multiple Listing Service

As a property sale progresses, the seller’s real estate agent updates its status in the MLS. These updates are then shared with other real estate websites.

Different platforms may interpret terms like ‘under contract’ and ‘pending’ in various ways.

Typically, ‘under contract’ indicates an offer has been accepted with conditions yet to be fulfilled.

‘Pending’ usually means all conditions have been met and the sale is nearing completion.

Sale Pending vs. Under Contract

The article by Michael Yessis on Clever Real Estate’s blog provides a detailed explanation of the distinctions between properties that are “pending” and those that are “under contract” in the real estate market.

Both “pending” and “under contract” indicate that a seller has accepted a buyer’s offer on a house or property. The key difference lies in the stage of the home-purchase process they represent:

Under Contract: This status means that the seller has accepted an offer, and the property is in the early stages of the sales process. During this phase, the buyer and seller work out any issues agreed upon in the contract, which often includes addressing contingencies such as financing, inspections, and appraisal.

These contingencies are conditions that must be met for the contract to become legally binding. The “under contract” phase is characterized by its potential for deals to fall apart, especially if contingencies are not met.

Pending: A property moves to “pending” status once all contingencies in the contract have been cleared. This stage is closer to the final sale, with fewer chances for the deal to fall apart compared to the “under contract” phase. However, it’s still possible for a sale to not close even at this stage.

Michael further explains that while it’s often possible to make an offer on a house that is either pending or under contract, the chances of successfully purchasing a home in these statuses vary. Properties under contract may still accept other offers, especially if the initial deal faces obstacles. On the other hand, making an offer on a pending property is more challenging due to the advanced stage of the sale process, though not impossible.

Why do Sales Pending or Under Contract Fall Through?

Why do Sales Pending or Under Contract Fall Through

In our further research, we found that there are many reasons why this is happening.

Mia Taylor, a well-known journalist in the field of real estate, provides an insightful look into why deals that are pending or under contract might not reach closing in her article on Bankrate.

  • Financing Not Approved: Even with a mortgage preapproval, changes in the buyer’s financial situation, such as a new debt or a drop in credit score, can lead to the mortgage not being finalized.
  • Contingencies Not Met: Home purchase agreements often include contingencies, like the need for the buyer to sell their current home or secure a mortgage. If these conditions aren’t met, the deal can fall apart.
  • Inspection Problems: Significant issues discovered during the home inspection can lead to the deal’s termination if the buyer and seller can’t agree on how to address them.
  • Low Appraisal: If the home appraises for less than the purchase price, and the buyer cannot cover the difference, the deal may not proceed unless renegotiated.
  • Title Issues: Liens or other legal claims against the property revealed during a title search can prevent the sale.
  • Cold Feet: Either party may simply change their mind about going through with the sale, which can lead to the deal falling apart, subject to any legal or financial consequences outlined in the sale agreement.

Can I Make a Formal Offer on a Sale Pending or Under Contract?

Can I Make a Formal Offer on a Sale Pending or Under Contract

You can still legally make an offer on the property if you wish because homes that are pending or under contract haven’t technically been sold yet.

As experts from OnTheMarket explain, when a property is described as “under offer” or “sold subject to contract” (SSTC), it generally means the seller has accepted an offer, but the contracts have not yet been exchanged.

This period can last several months due to necessary surveys, mortgage approvals, and other pre-sale processes. During this time, the sale can still fall through for various reasons, such as issues uncovered by a survey.

You can indeed make an offer on a house that is “under offer” or “sold subject to contract.” Many buyers and estate agents might prefer to use these terms to discourage further offers, aiming to proceed smoothly to the exchange of contracts. However, the practice of gazumping, where a new offer is accepted over an existing one, still occurs.

Legally, estate agents are required to pass any new offers to the seller until contracts are exchanged. Therefore, if you’re interested in a property that’s under offer or SSTC, you should not automatically assume it’s off the market. The final decision rests with the seller, who may consider new offers, especially if they are higher than the original


Can a buyer back out of a sale when the status is 'under contract' or 'pending'?
Yes, a buyer can back out if contingencies in the contract are not met or during the due diligence period, subject to certain conditions and potential financial implications.
How long does the 'pending' stage typically last in a real estate transaction?
The duration of the pending stage varies but usually lasts until all contingencies are met and the closing process is completed.
What happens to the earnest money if a sale falls through?
If a sale falls through due to unmet contingencies, the earnest money is typically returned to the buyer. However, if the buyer backs out without a contingency-based reason, they may forfeit the earnest money.
Can a seller accept a higher offer after a home is 'under contract' or 'pending'?
Legally, a seller is bound to the contract with the buyer unless the contract falls through. However, they may accept backup offers in case the current deal does not close.

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