Understanding the Differences Between Contingent, Under Contract, and Pending in Real Estate

In the complex world of real estate, buyers and sellers often encounter terms such as contingent, under contract, and pending. These terms can significantly impact the status and conclusion of a real estate transaction. This article aims to clarify these terms, providing a clearer understanding for all parties involved.

Contingent

Definition: A property is marked as contingent when an offer has been accepted, but certain conditions or contingencies must be met before the sale can move forward.

Home inspection: The buyers have the option to have the property inspected by a professional to ensure there are no issues with the property. Financing approval: The buyer must secure approval from a lender to ensure they can financially afford the property. Sale of the buyer’s current home: In some cases, the sale cannot proceed until the buyer sells their current home.

Implications: When a property is marked as contingent, the seller may still show the property and accept backup offers. However, the sale is not yet finalized. This allows the seller to keep the property on the market in case the buyer does not meet these conditions.

Under Contract

Definition: This term indicates that a seller and buyer have signed a purchase agreement. While it shows progress in the transaction, it does not necessarily mean that all contingencies have been waived or fulfilled.

Implications: A property listed under contract is a step advanced in the sales process. The buyer is typically expected to complete any pending contingencies, such as obtaining financing or completing an inspection. The property is off the market and the sale is more advanced than in a contingent status, but still not guaranteed.

Pending

Definition: A property is considered pending when all contingencies have been satisfied and the sale is in the final stages of closing.

Implications: In the pending stage, the seller is typically no longer accepting offers as the transaction is expected to close soon. This stage signifies a high likelihood of the sale being completed successfully.

Summary

Contingent: Offer accepted but conditions must be met. Under Contract: Offer accepted but contingencies may still be in progress. Pending: All conditions met, sale is about to close.

Understanding these terms helps buyers and sellers navigate the real estate process more effectively. Knowing the status of a property can help in making informed decisions and avoid misunderstandings during the transaction.

Additional Insights

For a property listed as contingent under contract, it typically signifies that an offer has been accepted but there are still pending contingencies to be addressed. Under contract without contingencies means that all required conditions have already been waived, and the property is off the market until the sale is finalized. Pending, on the other hand, signifies that all required conditions have been met and the sale is in the final stages, indicating a high likelihood of closing.

To provide assurance and transparency, both parties should clearly communicate the status of the property. A pending status indicates that the seller and their agent are confident that the sale has passed its major hurdles and is progressing towards a successful conclusion.

Common contingencies that buyers typically include when making an offer may include:

Home inspection: A comprehensive inspection of the property to identify any issues. Financing contingency: Ensuring the buyer can secure financing at a satisfactory rate and terms. Appraisal contingency: Confirming the value of the property meets the agreed-upon price.

By understanding these terms, all parties can approach the real estate process with clarity and confidence.