Under contract and pending have similar meanings when used as a status for a real estate listing. And, while they are sometimes used interchangeably, they have slight differences that can impact whether someone will make an offer.
When a property is for sale, the agent usually lists it on the Multiple Listing Service (MLS). As the listing moves through the sales process, the status changes. The status helps real estate professionals and buyers determine what properties are still available, have sold, or what listings are withdrawn or expired.
Under contract and pending listings both refer to properties where the seller has accepted a formal offer from a buyer and the sales process has started. The main difference in meaning is how close the property is to actually closing.
Under contract starts when an offer is accepted, but there are still contingencies in place and due diligence to be completed. Contingencies are stipulations that must be met before the sale can close. Examples of things that happen when a property is under contract include:
In this phase of the sale, there is still a chance that the sale will fall through. In most states, there is a due diligence phase where a buyer can still cancel the sale and have their deposit refunded. While under contract, the seller can still market the property and accept backup offers. Sometimes, they will still have showings. If an under contract listing says no show, the seller is probably confident the current sale will close.
When a listing moves into the pending phase, it means the sale is getting closer to completion. Usually all contingencies have been removed and there are just a few steps left before closing, like finalizing financing or making sure the title is clear. In pending status, there is generally no marketing, advertising, or property showings.
While under contract and pending listings both mean a buyer and seller have executed a contract, the biggest difference is how close the sale is to closing. When a contract is initially accepted and due diligence needs to be completed, a listing will move to under contract. As the sale moves towards closing, the listing will progress to pending. If you are unsure what stage a listing is in, it is best to contact the agent listed for the property.