Real Estate News

If you’ve ever spent time house-hunting, whether in-person or online, you’ve probably experienced the disappointment of finding the perfect home only to see that it is already being sold. This can appear in a number of ways, including “pending” or “under contract.” While many people confuse these, they actually represent different parts of the sales process. During your search for homes for sale in Minneola, it’s important to understand these terms and what they may mean for properties you are interested in.

How Home Sales Work

Buying a home is a more complex process than most purchases, where you simply exchange money for goods. The transaction usually involves three separate parties – the buyer, the seller, and the bank financing the home loan – as well as others like real estate agents in support.

Everyone must agree on the terms of the deal and agree before it can move forward.
Before we dive into the terms under contract and pending, it is helpful to know the general steps of a home sale. Below is a general flow:

1. The buyer chooses a home to buy and makes a formal, written offer.
2. The seller accepts the offer, perhaps after negotiations.
3. Buyer and seller sign a contract, usually with contingencies around things like financing and inspection results.
4. The buyer deposits earnest money into an escrow account or something similar, then lines up a mortgage with the lender of their choice.
5. The home is both inspected and appraised.
6. The deal is closed.

These scenarios can be much more complex and may involve other steps, but this gives you a high-level view of the events involved.

Under Contract and Pending

These two terms can vary slightly depending on the region you are in, but generally speaking, they are understood to be defined as follows. Under contract means that the buyer has made the formal offer and the seller has accepted- so step 3 as listed above. Sales pending means that all contingencies have been removed as the requirements are met, so step 6 above.

Usually, a sale pending property will be closer to being sold than a home that is under contract. However, it’s important to know that some agents and markets will use these terms interchangeably or use different language altogether. You may see terms like “contingent” or “option” that mean similar things in context.

Are Under Contract and Pending Statuses Final?

Deals in both of these statuses can still fall through based on a number of factors. Things like a surprise lien on the property, a low appraisal, or problems discovered during the inspection can all nullify a contract. The buyer may also be unable to secure the funds they need and therefore unable to purchase the house. While there is no good data, some realtors estimate this happens in as many as 20% of cases.

Because of this, it is still possible to make an offer on homes in these statuses unless contracts specifically have a clause preventing it. A home that is under contract is more likely to fall through, and usually, the seller’s agent will continue to show the home and accept backup offers. Once the deal is pending, they are less likely to continue accepting offers, but it is still technically possible and may be worth asking about on your dream home.

The Bottom Line

In short, both under contract and pending statuses will represent a time when a seller and potential buyer have agreed to pursue a home sale. Neither means the deal is completed or will be guaranteed to complete, but pending is generally a sign that all requirements have been met and the sale will move forward.

If you are unsure of the status of a specific home in Minneola, or you are struggling to find homes that are still available, it is best to work with an experienced real estate agent who can help you navigate these processes. Agents like the ones at Florida Realty often have access to information on homes before they are listed and other professional contacts who can help you secure your dream home and be the one under contract!