August 1st, 2022 at 11:00 am

Differences between under contract vs pending

Buying things is normally a pretty straightforward exchange: a seller puts a price on something, a buyer pays the price, and the seller gives the thing to the buyer. Of course, real estate doesn’t work quite so simply. There’s often more than one potential buyer in the mix, prices get negotiated, and even when a buyer and seller agree to terms, the house may not be sold.

That leads us to the issue of under contract vs pending and what those terms mean in real estate.

Sale pending vs. under contract both refer to periods when a buy and seller have agreed to terms but before the house is officially sold. At a glance, when a home is listed as “pending,” that means the home is in the final stages of a sale. If a home is “under contract,” there are still a few details that the seller and the buyer are waiting to finalize (such as appraisal value), before the sale can continue into the pending sale stage. 

What does under contract mean?

Simply put, under contract means that either or both parties are waiting for a few aspects of the contract to be fulfilled, reviewed, or finalized before a sale can move into its final stages (including the pending sale stage). These aspects are referred to as “contingencies.”

Before going diving into more detail for these terms, let’s touch on some of the steps of how a real estate sale generally goes:

This is already a pretty complicated home buying process which is why both buyers and sellers need to find a trusted real estate agent. The agents at Berkshire Hathaway HomeServices California Properties will help guide you through the home selling/buying process to make sure you get the best deal possible. But just getting to this point doesn’t mean you’re done.

Now that the seller and the potential buyer have agreed to terms (in principle), the home is under contract. But there is still an issue keeping the contract from being finalized: contingencies.


Once a house is under contract, it means that terms have been agreed to as long as all contingencies are met. So what are contingencies? They are extra terms that much be met before the contract is finalized. And if they are not met, the contract becomes void.

Most contingencies are put in place as protections for the buyer. The seller does not have to accept contingencies, but if they refuse any contingencies, it may affect the price of the offers they can get. Some examples of typical contingencies include: 

If the inspector does find something amiss, the buyer can choose to maintain their offer anyway, walk away from the sale, or the seller can agree to renegotiate for a lower price to cover the cost of necessary repairs.

As you can see with these contingencies, most are set up to protect the buyer. However, the seller can also put in their own clause so they aren’t just sitting and waiting while the buyer makes sure all contingencies are satisfied:

Once all contingencies have been met, the house moves from under contract to pending.

It’s worth noting that a contract doesn’t have to have contingencies. While inspection contingency and title contingencies are a reasonable part of due diligence, a seller may not want to agree to something like a financing contingency, especially if they have multiple, good offers on their home.

What does sale pending mean?

So, if there are no contingencies or all contingencies have been met, it’s now time for the house to be considered in the pending stage. This still doesn’t mean the house is sold, but we are getting very close. In the pending stage, a couple of things occur:

At this point, all that’s left to do for a sale to go from “pending” to “finalized” is the closing process. This consists of several different details that need to be taken care of before the home sale is finalized. Think of it as crossing the t’s and dotting the i’s. 

While closing can be viewed as a set of technicalities, it’s worth remembering that they can be expensive technicalities. They will generally fall somewhere between 2% and 5% of the total purchase price of the home.

How long will a house be under contract and pending?

The exact period of time that a home will be under contract and/or pending is impossible to say for certain. A contract with fewer contingencies will likely go through the under contract phase faster than one with many contingencies. And, of course, if issues do arise, they will need to be dealt with before a sale is final.

However, you can expect this period to take a while. The acceptance of an offer can be an exciting time, but there are still many steps that need to be taken before a house is officially sold.

Is the house sold now?

Now that sale pending vs under contract has been covered, the t’s have been crossed, the i’s have been dotted, what happens? 

Once you’ve taken all those steps and closing is complete, the sale is final. 

Buying or selling a house can often be an emotional time and it’s easy to overlook technicalities. That means it’s natural to focus on the offers and the sale itself and overlook technical elements like contingencies and closing costs. This is why having a trustworthy agent to guide you through the period after an offer is accepted can be just as valuable as having someone there while offers are being made.

Take the mystery out of real estate with Berkshire Hathaway HomeServices California Properties

It would be nice if real estate transactions were as simple as the everyday buying process. But, since these are such major purchases, perhaps it shouldn’t be surprising that they can be so complicated. But that’s why we at California Properties, we pride ourselves on simplifying the process so you can feel confident whether you’re buying or selling. If you’re also wondering, “what is a fixed rate mortgage,” we’ve got you covered!

California real estate can be hard. Let us make it a little easier for you.

Sources: US News, US News, US News, SF Gate

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