What’s the difference between pending and under contract? These two terms are commonly used in the real estate industry, particularly when discussing the status of a property sale. While they both indicate that a transaction is in progress, there are distinct differences in their meanings and implications for both buyers and sellers.
Pending refers to a situation where a property has been listed for sale and has received an offer from a buyer. However, the transaction is not yet finalized. During this time, the seller may continue to show the property to potential buyers, and the buyer may still be in the process of obtaining financing or completing inspections. The pending status can last for a few days to several weeks, depending on the complexity of the transaction.
Under contract, on the other hand, signifies that the seller has accepted an offer from a buyer, and both parties have agreed to the terms of the sale. At this point, the buyer is no longer allowed to show the property to other potential buyers, and the seller is committed to selling the property to the buyer. The under contract status often involves a period of due diligence, where the buyer conducts a thorough inspection of the property and ensures that all necessary conditions are met before the sale can be finalized.
One key difference between pending and under contract is the level of commitment from both the buyer and seller. In a pending sale, the seller may still be open to other offers, while in an under contract sale, the seller is committed to the buyer and cannot entertain other offers. This means that an under contract property is generally more secure for the buyer, as the seller is less likely to withdraw the offer.
Another difference lies in the timeline for closing the sale. A pending sale may take longer to close, as there may be additional negotiations or issues that need to be resolved. An under contract sale typically has a more defined timeline, as both parties have agreed to the terms and are working towards a specific closing date.
For buyers, understanding the difference between pending and under contract is crucial. A pending sale may still be subject to changes, while an under contract sale is more likely to proceed smoothly. Buyers should also be aware that an under contract property is not yet sold, and there is still a possibility that the deal may fall through if certain conditions are not met.
On the seller’s side, the distinction between pending and under contract is equally important. A pending sale allows the seller to maintain flexibility, while an under contract sale ensures that the property will be sold to the agreed-upon buyer. Sellers should also be prepared for the possibility of a deal falling through in an under contract sale, especially if the buyer fails to meet the agreed-upon conditions.
In conclusion, the main difference between pending and under contract lies in the level of commitment and the timeline for closing the sale. Understanding these differences can help both buyers and sellers navigate the real estate market with greater confidence and clarity.
