What is Pending Contract?
Pending contract is a stage of the process where all of the contract’s contingencies—such as those pertaining to inspections, ordering appraisals, and securing financing—have been satisfied or waived. Usually, the pending phase comes before the contract closes. In order to complete the sale, both parties must complete the financing, prepare any necessary supplemental paperwork, and coordinate the transaction with all relevant parties (lenders, escrow agents, and title firms). The likelihood of the transaction falling through is much reduced, although it is still possible (for instance, if the buyer is unable to obtain financing).
Key Features of Pending Contract:
- Pending denotes that there is a contract on the house and that all requirements have been satisfied for the transaction to conclude. Backup bids are usually not accepted for pending properties.
- A sale is moving closer to completion when a listing enters the pending phase. Usually, all contingencies have been eliminated, leaving only a few minor tasks to complete before closing, such as completing the financing or ensuring a clear title.
- There is often no marketing, advertising, or property showings when a property is in pending status.
Difference between Under Contract and Pending Contract
The terms ‘Under contract’ and ‘Pending contract’ are often used interchangeably, but they represent different stages in the process. Understanding the distinction between the two can be crucial for both buyers and sellers. Under contract indicates that all the conditions of the sale, such as inspections and financing, have been agreed upon and the transaction is moving toward closing while a Pending contract typically refers to a property that has an accepted offer but hasn’t closed yet.
Table of Content
- What is Under Contract?
- What is Pending Contract?
- Difference between Under Contract and Pending Contract
- Conclusion
- Difference Between Under Contract and Pending Contract- FAQs