The difference between pending and under contract is subtle, and in some online services it is synonymous. The distinction has to do with how far along the deal is. A pending contract is under contract, but the buyer and seller have worked out the contingencies in the agreement. Therefore, the sale is close to closing.  

  • Under Contract simply means that a property has a binding contract. 
  • Pending in real estate means that the parties met all contingencies of the agreement. 
  • Whether pending or under contract is better depends on which party to the deal you talk to. 

In many areas of the county the two terms are synonymous. Even and Zillow do not distinguish between the two. Therefore, it is a subtle difference.  

House Under Contract Meaning 

Under contract means that a buyer submitted a contract to a seller, and both parties executed the contract by signing it. After this there is a due diligence period occurs according to contract contingencies. Bankrate gives a list of common clauses: 

  • Home inspection 
  • Appraisal 
  • Homeowner’s insurance 
  • Title 
  • Mortgage 

Lawyers include these to protect the buyer, but they must be dealt with in a timely manner. For instance, if the home inspector finds a problem, then the buyer may renegotiate the terms or cancel the agreement. If the appraisal comes back low, the buyer cannot get homeowner’s insurance, the owner cannot provide clear title, or the bank decides it will not underwrite the loan the buyer may back out. 

Can you make an offer on a house that is under contract? 

You can make an offer on a house that is under contract, but the seller cannot replace an executed agreement. Therefore, your they will hold your offer in backup. The owner holds these in reserve in case something goes wrong. Some benefits for the seller to accepting other include: 

  • Leverage negotiating issues with the buyer 
  • Not having to put the house back on the market 
  • Possibly better terms 

If you want to bid on a house that is under contract, remember that very few sales fall through. However, it does happen. If you get a call that the deal fell through be careful. It may be because of an issue with the buyer (cannot get a mortgage, for instance), but it may also be because of a major problem with the property. 

House Under Contract Still Showing 

House under contract showing is a distinction many real estate sellers make when they feel they have a weak deal. Several conditions can lead the seller to believe this: 

  • They believe the buyer may have trouble getting a mortgage 
  • The offer is low, and the seller wants negotiating leverage 
  • The offer is high, and the seller fears the house will not appraise 

The most common reason is the buyer put a house sale contingency in the offer. If they need to sell a house to buy a new one there is increased risk for the seller. While this is very common, it does create anxiety for the seller, especially if they need to sell the house to buy another one, too. 

Pending in Real Estate Meaning 

Pending is a subcategory of under contract meaning that the parties met or dismissed all contingencies. Once the clauses we listed earlier are taken care of, there is still work to be done. First, the lawyers set a closing date so each party will sit together and sign the final documents. This is important because there are fees and taxes that must be figured precisely to the day of closing. These include: 

  • Property taxes 
  • Homeowner’s insurance 
  • Mortgage schedule 

Next, the buyer and seller review the documents or errors. Other parties also review, including the lawyer, title company, and bank. Finally, there is a walk through on the day of closing. This happens in a relatively short time if there are no problems, usually about three days. 

Do pending offers fall through? 

Pending offers do rarely fall through. When I sold real estate full time, I never had a sale that got to this point fall apart. However, I did know other agents who did. This is anecdotal because there are no reports on the number of deals that get to this point that fail. Usually, deals die at this point because the buyer made a large purchase that torpedoed the underwriting process.  

I also saw a couple of occasions where there was animosity between the parties, and the seller severely damaged the property. The buyer then refused to finish the transaction.  

Remember that both the seller and buyer want the transaction to settle, and they are not the only ones. Lawyers, real estate agents, title companies and lenders do not get paid if the deal does not close. Often the buyer and seller are emotional, but the professionals deal with issues and hold the deal together for their own interests. 

Can you make an offer on a house that is pending? 

You can make an offer on a house that is pending, but do not be hopeful that you will be able to purchase the home. As we saw before these almost always close.  

What is better pending or under contract? 

Whether pending or under contract is better depends on which party you are to the contract. If you are a buyer or seller who wants the transaction to close, then pending is better because you are further into the process. 

If you are potential buyer with a backup offer, then any contingencies can lead to problems. The longer the deal holds together the less likely it is to fall apart. 

Final Thoughts on the Difference Between Pending and Under Contract 

In either case, the likelihood that the transaction fails is small, but you never know what will happen. If you really like the house, then go ahead and submit a bid. However, keep looking at other properties. 

If you are a buyer looking for a house on Zillow or you may be wondering what the difference between pending and under contract is. On these sites and others there is no difference. However, if you call about the house the listing agent may distinguish whether there are contingencies left to resolve.

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