Under Contract vs. Pending: A Home Buyer’s Guide to Status Tags

Searching for a home to buy can be a time of excitement and anxiety. You may be building an online watchlist of homes you’re interested in seeing, but then you notice a label tagging your favorite property listing as “under contract” or “sale pending.” You wonder, what’s the difference between under contract versus pending?

Can you make an offer on a home that’s under contract? What buyer contingencies might put a listing back on the market? What home contingency missteps should you avoid when making an offer?

In this post, we’ll explain terms like “under contract,” “sale pending,” and “active under contract” and how they might impact your home-buying journey.

What does ‘under contract’ mean when buying a home?

When you find a home listing marked as “under contract,” it indicates that the seller has accepted an offer from a buyer, but the sale is not yet final. While under contract, there are typically contingencies in the buyer’s offer that need to be resolved before the sale moves forward. If contingencies are not met, the deal might fall through.

Contingencies while ‘under contract’

Here are some common types of contingencies in residential home sales:

Financing contingency: A financing or mortgage contingency safeguards buyers who need to finalize a home loan. If the buyer fails to secure financing, they can withdraw without losing their deposit.
Appraisal contingency: Lenders typically require an appraisal to confirm the home’s value before approving a mortgage loan. An appraisal contingency allows the buyer to either renegotiate their offer or freely walk away from the agreement if the appraisal comes in under the contracted offer price.
Inspection contingency: This contingency clause allows the buyer to have a professional inspection of the property and then decide whether to move forward with the purchase. Significant issues discovered can lead to renegotiations, repairs, or even contract termination without consequences for the buyer.
Home sale contingency: A home sale contingency says that if the buyer doesn’t sell their current home before a specific date, then the contract can be terminated without penalty. Making an offer contingent on the sale of an existing home is often necessary for buyers who need to use equity to afford the down payment or closing costs on a new house. Sellers are often wary of this clause.

Can I make an offer on an ‘under contract’ home?

While a home is under contract, it’s still possible, though less likely, for other offers to be considered. If contingencies fall through and the initial deal collapses, the property may become available again. However, it’s important to have realistic expectations and continue exploring other options in your home search.