What Do These Real Estate Contract Terms Actually Mean?
Think back to the last time you were searching for homes... If you're actively working to find a home, that may have been just a few minutes ago.
Chances are you saw terms while searching that you may or may not know the true meaning of.
The terms Under contract, Contingent, and Pending are often used interchangeably and can confuse many people. They don’t mean the same thing, and the meaning varies depending on who has published the statement and from market to market. Don’t worry, we have you covered as it relates to the Raleigh and Triangle area.
Under contract is a generic term meaning the buyer submitted an offer to buy the property and the seller has accepted the offer. We have a legal agreement to buy and sell the property. Both parties have committed to proceed with the transaction, and it will proceed once any contingencies are met or waived by either party.
If a property is under contract, there is a chance that the deal can fall through due to unforeseen circumstances. In some cases, you may still be able to still make an appointment to see the property and back up offers may be considered.
Once your home is under contract, but some contingencies need to be met, your property is considered contingent. A contingent contract means that some condition hasn't yet been met. A contingency is anything that needs to happen before the deal can actually take place. It could be final financing conditions, inspections have not been completed, buyers could need to sell a home, or other contractual qualifications.
In the Triangle, this is a common term used in our Multiple Listing Service. It indicates the home is under contract and there are terms and conditions remaining to be met. The seller may show the home at their discretion and may be open to a back up offer. Once those items are addressed the deal can continue as planned. If you're selling your home, contingencies protects you if something comes up with either buying another property or finding an acceptable offer from someone who wants to buy yours. Setting these conditions makes sure everything goes as planned before the settlement or closing..
Pending is used similarly to Contingent, and in the Triangle it is generally used to indicate (or at least imply) the contract is very strong. The seller is not interested in showing the home any more and there is little reason to believe the contract will not reach settlement. The seller and the buyer have agreed to each other's terms and all contingencies have been met, the home is marked as pending and taken off the market.
The deal hasn't closed yet, but being in the pending stage indicates the deal is virtually certain or very close to settlement. finish line of the deal. While there is a chance that a property with the pending status can return to the market due to an inspection, appraisal, or financing issue, the chances are lower at this stage.
It doesn't have to be confusing
If you're thinking about selling your home but are unsure of the process, we can help simplify and answer questions.
We have you covered
Our goal is to make the process of selling your home as easy as possible. We'd love to show you how.