What is the difference between under contract and pending

If you peruse home listings, you may see that some properties are listed as “under contract” or “pending.” If you find a house you like with one of those statuses noted, you may still have a shot at making it your own.

What Does “Under Contract” Mean?
When a house is under contract, that means a buyer has made an offer and the seller has accepted it. That doesn’t necessarily mean that the interested party will buy the house, however. 

There are a lot of things that can go wrong. A title search may reveal a lien on the property, the buyer may be unable to get financing because of a low credit score or high debt-to-income ratio, or the house may appraise for less than the agreed-upon price. Any of those issues can cause the deal to fall through.

To hedge their bets, sellers frequently continue to accept offers on their houses, even after agreeing to a contract. That way, if things don’t work out for some reason, the seller won’t have to start from scratch and search for another buyer.

What Is a Pending Sale?
When a buyer and seller agree on a contract, it may contain a series of contingencies. Common contingencies relate to a home inspection and financing, but there may be others. If a contingency isn’t met, the deal can fall apart.

If a sale is pending, that means the parties have agreed on a contract and all the requirements related to contingencies have been met. A house that is listed as “pending” is much closer to actually being sold than one that is listed as “under contract.” There is still a possibility that things won’t work out, but it’s less likely. 

If you find a house you like and the sale is pending, you may still have a chance to buy it, but the odds are lower than they are if a property is under contract. At this stage, many seller’s agents will refuse to entertain bids from other potential buyers.   

Things Aren’t Always Clear
It’s important to note that real estate agents use terms such as “under contract” and “pending” in different ways in different regions. One or both of these terms may mean something different where you live.

Real estate agents update listings in multiple listing services, but MLSs vary in the terminology they use. Sometimes an MLS doesn’t have a status label available that accurately reflects a house’s status. That can make things confusing if you see a house online that is listed as “under contract” or “pending.”

If you have a question about a house’s status, ask your agent or the listing agent for clarification. You may still have a chance to get the house you want, or you may have to keep looking.

As Content Editor, Paige Brown creates, curates, edits and publishes content for RISMedia’s ACESocial platform. She also helps develop marketing materials and email campaigns, as well as online news, blogs and profiles for Real Estate magazine. Paige graduated from Central Connecticut State University with a B.A. in Journalism and Public Relations.

While under contract and pending are often used interchangeably, they have very different meanings. 

Whether you’re an agent, seller, or buyer, it’s important to distinguish under contract vs pending to get the most out of the real estate process. 

Discerning under contract vs pending could lead to a potential buyer landing their dream home and a seller getting top dollar for their home.

Ready to learn more? Take one of our most popular online classes, 10 Ways to Find Great Real Estate Deals, today!

In this article, we’ll break down both the difference between the real estate terms so there’s no confusion on your part as you go through the real estate process. 

Under Contract vs Pending: What’s the Difference? 

Under contract vs pending refers to the stage of the home-buying process. 

Under contract is typically an early stage where the seller and buyer have recently entered into a contractual agreement.

Pending is a late stage in the process once the contingencies are fulfilled. 

Under contract is the first stage after entering into a signed agreement, and pending is the last stage before the closing table. 

Understanding under contract vs pending requires knowledge of other terms like no show and backup offers, which we will get to later in this article. 

What is Under Contract? 

For a home to go under contract, the seller must accept a formal offer submitted by a buyer. 

During this time, the selling agent can still schedule showings and allow other interested buyers to submit backup offers. 

An advantage of going under contract is having an agreed-upon offer and starting the sale process. 

It brings you one step closer to selling or buying the home. 

A disadvantage is turning away potential backup offers because when they see under contract on the listing, they’ll assume they don’t have a chance at getting the house. 

An example of this disadvantage is a buyer backing out of the contract after an inspection. If severe issues are found during the inspection and they are still in the due diligence stage, they have the right to terminate without consequence.

If there are no backup offers, the house will go back on the market as available, and the process will start over. 

Make sense? 

Now that we’ve discussed under contract, let’s take a deeper dive on pending. 

What is Pending?

A pending contract is much closer to closing than under contract. 

A key difference in under contract vs pending is all contingencies have been fulfilled in pending contracts, and at this point, selling agents typically stop accepting backup offers and showing the property. 

The advantage of a pending sale is knowing that you’re almost at the finish line. 

All contingencies are addressed, and the deal is likely just waiting on financing or a clear title before finalizing. 

A downfall is the lack of backup offers and showings. 

An example of a pending sale is when the home has been inspected and appraised and is only waiting for financing before closing.  

Under Contract vs Pending: FAQs 

Next, we’ll take a look at some of the most commonly asked questions on the topic of under contract vs pending.

Q. Under contract vs pending: are they the same thing? 

No, while there are some similarities, they are not the same thing. 

Under contract means the seller and buyer have entered into an agreement, while pending contracts have fulfilled the contingencies, and are steps away from closing.

Q. Can a house still have showings if it’s under contract or pending? 

Yes, the listing agent can choose to continue showings even if the home is under contract or pending.

Q. Can you submit an offer on a home that’s pending or under contract? 

Yes, if the selling agent allows, you can submit a backup offer on a home even if it’s under contract or pending. 

Q. Can You Still Buy A Home If It’s Under Contract? 

In most states, the seller’s agent can list the home as “show” or “no show” even if they’re under contract. 

Homes listed to show even after falling under contract allow potential buyers who were previously unable to view the house to submit a backup offer. 

This allows potential buyers to submit offers in case the current contract falls through. 

A key difference in under contract vs pending is most under contract homes still accept backup offers, which protects the seller. 

Q. Can You Still Buy A Home If It’s Pending? 

One of the key differences in under contract vs pending comes to showing homes. 

While the selling agents still have the option to show a home if it’s pending, it’s not commonly practiced. 

Buyers may continue to submit backup offers, but at this point, there’s only a slim chance the agent will allow showings or accept offers.  

Q. What Are Backup Offers? 

Backup offers are submitted by buyers interested in the property even after it’s gone under contract or is pending sale. 

These offers allow sellers to have another chance at closing the property even if their current contract falls through. 

When it comes to under contract vs pending, homes that are under contract typically receive more backup offers than pending homes.

Backup offers give the sellers peace of mind but often go unused since most contracts in the pending process make it through to a final sale. 

Submitting a backup offer will likely put you at the top of the list if a deal does fall through.

Q. How often do sale pending or under contract deals fall through?

It’s quite uncommon for pending or under contract deals to fall through. 

On average, only around 5% of deals will fall through before the completion of the sale. 

The difference in percentage when it comes to under contract vs pending homes is very slim since both are likely to make it to the closing table.

Low appraisals, poor inspections, and buyers being denied financing are the main reasons for termination at this stage. 

The Bottom Line: Under Contract vs Pending 

With many similarities, it’s important to understand the concept of under contract vs pending. 

Under contract homes are in the beginning stages and still need to meet many contingencies before making it to the closing table. 

On the other hand, a pending home has fulfilled the contingencies and is likely just waiting for the financing or title to come through. 

Pending homes are usually only steps away from closing. 

Distinguishing under contract vs pending can help agents on the buying and selling side best represent their clients. 

Both contract stages have a high chance of making it to the closing table. 

It’s important to remember that these are different terms and should not be used interchangeably.

With the concept of under contract vs pending cleared up, the buying and selling sides can stay on the same page throughout the entire purchasing process. 

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