What is Under Contract?
A property that has the listing status ‘Under contract’ signifies that the seller has already accepted an offer from a buyer, and it can be classified as either contingent or non-contingent. The first status, contingent status, indicates that before the transaction can be completed, either the buyer, the seller, or both must satisfy the terms of the agreement, or there will be contingencies. The contract may still go through even if the requirements are not fully achieved (i.e., the contingencies are not met), maybe with the parties agreeing on re-negotiated terms. If not, the agreement is likely to collapse, and the property will be put back up for sale. When a property’s state is specified in a contract as non-contingent, that is the second situation. In this case, the buyer agrees to acquire the property at the agreed-upon price and in its existing state, with no special conditions included in their offer.
Key Features of Under Contract:
- Under contract indicates that although the seller has accepted an offer, certain requirements still needs to be met before closing.
- There is still a risk that the deal won’t go through at this point. A buyer has the option to back out of the deal during the due diligence period in most states, receiving a refund of their deposit.
- The seller may continue to promote the property and take backup bids while the agreement is in effect. They will occasionally still have showings.
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
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