Are you confused about the terms pending vs under contract when it comes to real estate? You’re not alone. Many people don’t understand the difference between these two terms, but understanding them can be a key factor in successful real estate negotiations.
In this blog post, we’ll discuss the differences between under contract and pending and how they can affect the transaction. We’ll also discuss the role of contingencies in both under contract and pending contracts and how they can shape the outcome of a real estate deal.
Defining under contract
When a buyer makes an offer on a property and the seller accepts, the property is said to be under contract. This means that the buyer and seller have entered into a legally binding agreement for the purchase and sale of the property. Once a property is under contract, the buyer is obligated to purchase the property and the seller is obligated to sell it, assuming all terms and conditions in the agreement are met.
Pending vs under contract: What’s the Difference?
A contingent sale is one where the sale of the property is contingent upon certain conditions being met, such as an inspection or financing. A pending sale is one where all conditions have been met, and the sale is awaiting closing.
A contingent beneficiary is someone who will receive the proceeds from the sale if certain conditions are not met. For example, a bank may require that a beneficiary be named in order to release a loan, which would make them a contingent beneficiary.
Why the terms are used
Real estate transactions typically involve many different parties, each with their own unique roles and responsibilities. As such, it is important to clearly define the terms used when discussing a sale in order to ensure that everyone understands their respective rights and obligations. In real estate, the two most common terms used to indicate a sale are “under contract” and “pending sale.”
The difference between the two terms is an important one to understand. A property that is under contract means that the buyer and seller have signed a purchase agreement, usually with contingencies, and that the sale is pending on the satisfaction of certain conditions. Meanwhile, a property that is pending sale indicates that all of the necessary conditions have been met by the buyer, such as obtaining financing, and that the sale is imminent.
What is a contingent beneficiary? A contingent beneficiary is someone who will be entitled to benefit from a transaction if certain conditions are met. For example, if the primary beneficiary dies before the transaction is complete, then the contingent beneficiary will be entitled to receive the proceeds. This can be particularly important when it comes to real estate transactions, as the primary beneficiary may not have time to finalize everything before they pass away.
Make sure you know the difference between an Under Contract and a Pending sale – Understand how contingencies shape the outcome of a real estate transaction.
The difference between under contract and pending
When it comes to real estate, two terms that are often confused are “under contract” and “pending”. Both of these terms are used to refer to a property that is in the process of being sold, but they mean different things.
Under contract means that the buyer and seller have agreed to the sale, and all of the necessary paperwork has been signed. This usually happens after an offer has been made by the buyer and accepted by the seller. The sale is contingent upon the fulfillment of certain conditions such as an appraisal, title search, or home inspection. Once those conditions have been met, the sale can move forward.
Pending means that the contract has been executed, but the sale is not yet complete. This usually happens when the buyer and seller are waiting on financing, an inspection, or another third-party approval before closing. It is important to note that while a property may be pending, it can still fall through if any of the contingencies are not met.
When it comes to contingent vs pending sales, it’s important to understand what is contingent and who is the beneficiary.
A contingency is a clause that must be satisfied before a contract becomes legally binding. The beneficiary is typically the party who stands to gain from a contingency being fulfilled (e.g., the seller may be the beneficiary of an inspection contingency).
Understanding the difference between under contract and pending is important for buyers and sellers alike. For buyers, it helps to know how long a sale may take and what conditions need to be satisfied in order for the purchase to go through. For sellers, it helps to know when a sale is likely to be finalized so they can plan accordingly.
Stop the confusion: learn the key difference between under contract and pending in real estate transactions. Find out what a contingent sale means and how it can affect the outcome of your real estate deal.
Why it matters to sellers
When it comes to real estate transactions, understanding the terms used to describe a home’s status is important for both buyers and sellers. For sellers, understanding the difference between under contract and pending can make a big difference in the outcome of the sale.
Under contract means that a buyer and seller have reached an agreement on the sale of a property and have signed a binding purchase agreement. The seller is usually given a certain period of time to complete inspections and appraisal, with contingencies written into the agreement that can release the buyer from the contract if they are not met.
Pending sales refer to a property where a buyer has made an offer and is awaiting approval from the seller.
If accepted, the property would then move into an under contract status.
The difference between under contract and pending is important for sellers because it can give them an indication of how likely the sale is to close. With an under contract status, the sale is much more likely to go through, whereas pending sales may still fall apart.
Another term you may hear in real estate transactions is “contingent sale”. This refers to a sale where the buyer is waiting for something else to happen before they can officially close on the property. It could be a loan approval, a home inspection, or even another sale they need to complete first.
It’s important for sellers to understand these terms when listing their property, so they know what to expect throughout the process.
Unravel the Confusion: Understand the Differences Between Under Contract and Pending Real Estate Deals. Get the Facts on Contingent vs Pending Sales to Get the Best Deal.
Why it matters to buyers
When you’re shopping for a home, it’s important to understand the difference between under contract and pending, as this could affect whether or not you can make an offer. When a home is listed as “under contract”, this means that the buyer and seller have agreed on a purchase price, and the transaction is being processed and finalized. At this point, the seller has accepted the buyer’s offer and is legally obligated to sell the home to them.
When a home is listed as “pending”, this typically means that a buyer has submitted an offer, but the offer is contingent upon certain conditions. These conditions may include an appraisal of the property, the buyer getting approved for a loan, or the buyer selling their current home. Until these conditions are met, the sale is not yet final.
Don’t be in the dark about real estate contracts: know the difference between under contract and pending and how contingencies can affect the transaction.
A contingency clause in a contract is a condition that must be fulfilled in order for the contract to be considered valid. If the buyer is unable to fulfill the contingency clauses, the contract may be terminated and the sale will not go through. Contingencies are common when buying a home, and it’s important for buyers to understand what they are and how they work before submitting an offer.
It’s also important to note that a pending sale doesn’t always guarantee that the sale will close; there could still be other contingencies that need to be satisfied before the sale goes through. Additionally, in some cases, a pending sale may not even involve a buyer at all—it could just be a contingent beneficiary making a claim on the property.
A contingent beneficiary is someone who has a legal right to inherit the property if certain conditions are met (for example, if the original owner dies before transferring ownership).
Understanding the difference between under contract and pending sales can help buyers make an informed decision when buying a home. Knowing whether or not contingencies exist on a home can help buyers decide if it’s worth submitting an offer and how much money to offer, as contingencies can affect both the sale price and timeline of closing. By understanding these terms and knowing what contingencies may exist on a home, buyers can make sure they’re making a sound financial decision when purchasing a property.
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