When it comes to buying or selling a home, there are various stages in the process that can be confusing for both parties. Two terms that often cause confusion are “pending offer” and “under contract.” While these terms may seem interchangeable, they actually have distinct meanings and implications. In this article, we`ll explore the difference between a pending offer and under contract.
A pending offer is a term used to describe a situation where a buyer has submitted an offer on a property, and the seller has accepted it, but the sale has not yet been completed. This means that the seller has not yet signed the final paperwork, and the transaction is still pending. During this time, the buyer can choose to back out of the sale without facing any financial or legal consequences.
There are various reasons why a sale may be pending. For example, the buyer may still need to secure financing, or there may be conditions that need to be met before the sale can be completed. In some cases, a pending offer may be the result of a counteroffer, where the seller has made changes to the original offer, and the buyer has accepted them.
When a property is under contract, it means that the buyer and seller have both signed a legally binding agreement that stipulates the terms and conditions of the sale. This means that the sale is no longer pending and that both parties are committed to completing the transaction. Once a property is under contract, the seller cannot accept any other offers, and the buyer is legally obligated to purchase the property.
Under contract is the final stage in the buying and selling process. During this stage, the buyer will typically have a home inspection, secure their financing, and prepare for the closing. The seller is also obligated to make any necessary repairs and prepare the property for the closing.
The main difference between a pending offer and under contract is the level of commitment from both parties. A pending offer is a non-binding agreement that either party can back out of without consequences. On the other hand, when a property is under contract, both the buyer and seller are legally obligated to complete the transaction.
Another key difference is the impact on the marketability of the property. When a property is listed as pending, it is still technically available for sale. However, most buyers will avoid making offers on pending properties as they assume the sale will go through. When a property is under contract, it is considered off the market, and buyers will typically look for other properties to purchase.
In conclusion, while pending offer and under contract may seem similar, they have distinct meanings and implications. A pending offer means that the sale is still pending, and either party can back out without consequences. Under contract means that both parties are legally obligated to complete the transaction, and the property is off the market. As a buyer or seller, understanding these terms and their implications is crucial to making informed decisions in the buying and selling process.