After months and months of searching, it finally happens. You’ve found your dream home. But there’s a catch. Whether you scoured a home listing website late at night or you drive by the perfect property on a Sunday morning, it’s disappointing to find out that a home you’re interested in is under contract or pending.
Terms like “under contract” and “pending” tend to imply that the home is sold and off the market, but that actually isn’t the case. If you know whether a house is pending or under contract, you can form a plan for making a bid yourself.
In addition to the question of pending vs. under contract, you may find there are contingencies on the sale of the home that may open the door for you to buy it down the road. So knowing the breakdown of contingent vs. pending or under contract is also important.
We’ll provide insight into what the differences between under contract, pending, and contingent are, what it means for a home for sale to be in these stages, and more key details about the home buying process.
When a home is under contract — which is sometimes called “active under contract” — it means that the buyer has made a formal offer on the property and the seller has accepted their offer. While there is a good chance the sale will go through, if your dream home is under contract, you don’t have to necessarily give up hope. We’ll explain why in a minute.
For a home to be listed as pending, that means the home is under contract and there are no longer any contingencies on the sale. Once a property is listed as pending, the home is much closer to actually being sold than when it’s under contract.
If a home is listed as being a contingent sale, that doesn’t mean the home is sold or an offer has been made. Instead, it refers to the sale of the home being dependent on a contingency working out. Both sellers and buyers can come to the table with contingencies that are required for the sale to go through (such as the buyer selling their current home first).
You may see a home listed as being both a contingent sale and under contract. The good news for someone who wants to buy a home that is already under contract is that if there are contingencies in place, there is a better chance the sale won’t go through.
It’s hard to conceptualize what these different sales terms mean if you aren’t familiar with what it takes to buy a home. This brief overview will give you an idea of how the process works and what order each of these statuses come into play.
Step 1: The buyer tours homes and finds one they want to make an offer on.
Step 2: The buyer makes a formal offer in writing, and they may agree to contingencies put in place by the seller or set their own.
Step 3: The seller considers the offer.
Step 4: Negotiations may ensue at this point.
Step 5: The seller accepts the offer (if all goes well).
Step 6: The seller and buyer sign a contract (that will be contingent on certain factors such as inspection results) — the home is now under contract.
Step 7: The buyer’s earnest money will be deposited into an escrow account.
Step 8: The buyer applies for a mortgage.
Step 10: The home will go through an inspection and appraisal — you are now at the sale pending stage.
Step 11: The deal will close.
