Home Buying in Denver>Question Details

edgc2, Home Buyer in Palo Alto, CA

difference between "under contract" and "sale pending"

Asked by edgc2, Palo Alto, CA Mon Mar 25, 2013

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Sean M. Dougherty’s answer
Not sure I understand a couple of the answers here, but I'll go ahead and give you my perspective. Both can mean the same thing - that there's a contract on a home that has been for sale. The difference would be more pertinent to Agents in that typically, a home that is Pending means that the Seller is not taking any other offers, whereas a home that is Under Contract typically has owners and an agent who are actively encouraging backup offers on the home.

These terms can be used interchangeably with either short sale homes, foreclosed homes, or privately owned homes. The only real difference is whether or not the owner is willing to entertain backup offers.

Hope that helps.
1 vote Thank Flag Link Mon Mar 25, 2013
Sean, if you read the MLS rules it states specifically the difference, pending is NOT for a regular sale. It is section 2.7 and 2.8 of the rules.
Flag Mon Mar 25, 2013
DITTO!
Flag Mon Mar 25, 2013
GREAT response Sean.
Flag Mon Mar 25, 2013
The question was asked from California but seems to apply to Denver transaction. Interesting!

In our area, the San Francisco Bay Area, PENDING is the mls status or a listing in which the buyer and seller – whether normal sale, short sale, or REO – have contractually agreed to a purchase/sale. In other words, the property is “under contract”.

To add more confusion, there are several different multiple listing services that provide coverage to different parts of the Bay Area. Among them there are several permutations of PENDING…

Pending, awaiting Short Sale Lender approval
Pending REO
Pending, Show for BackUps
Pending, Do Not Show
Pending, Contingent upon sale of another property
And more…

We must remember that “real estate is local”.
0 votes Thank Flag Link Mon Mar 25, 2013
Looks like you are buying here in Colorado, but note the terms may differ state to state...

Under contract is an offer accepted by the seller. Many sellers are still accepting "Back up offers" but you would need to talk with the listing agent if that were the case.

Pending is waiting for a bank to confirm the acceptance of the terms of the contract. This usually deals with short sales.

Hope this helps and best of luck with the transaction.

Bill Pearson GRI, SRES |"Your Denver Realtor For Life"
ERA Herman Group Real Estate| 201 Columbine Street| Suite 301| Denver CO 80206
720-329-1470 |Bill@DenverRealtorForLife.com
5280 Magazine FIVE STAR Real Estate Professional – 2010, 2011, 2012
0 votes Thank Flag Link Mon Mar 25, 2013
Edgc2,

Good question. This has been a controversial topic since it was instituted by the MLS. skeeter has the best answer below. So basically, 'Under Contract' should apply to normal sales, 'Pending' should apply to bank and corporate owned homes and the dreaded 'short sales'. Be aware that this is the ruling here in Colorado. Under California the interpretation could be different.

Robert McGuire ASR
Realtor/Consultant
Your Castle Real Estate
Direct - 303-669-1246
http://about.me/robertmcguire33
0 votes Thank Flag Link Mon Mar 25, 2013
So many good answers, so many subtle gray areas. Ask your broker to help you navigate the gray areas of our industry. Good Luck!
0 votes Thank Flag Link Mon Mar 25, 2013
If you submit your listing in Metrolist here is the following rule:

Section 2.7 Under Contract and Under Contract Still Accepting Offers: When a seller & buyer have a mutually executed contract, but the property is still available for showings and offers are still being accepted, disclosure must be specified in the Status conditions Field. Any listing still accepting offers must be available for showings.

Section 2.8 Pending Still Accepting Offers: When a bank owned/GSE, estate, government, corporation/trust or relocation company has an accepted offer awaiting signatures, or a short sale offer has been submitted to a 3rd party for approval. A listing in Pending status on on market and still available for showings.

The Metrolist rules are pretty specific, and Pending does not apply to a normal sale.
0 votes Thank Flag Link Mon Mar 25, 2013
Looks like there are different interpretations of the two terms, but I've always operated under the assumption that:

"Under Contract" would mean that an offer has been accepted by a seller and there exists a mutually-executed contract. Sometimes the seller and listing agent will still welcome backup contracts and, therefore, continue to schedule showings...and sometimes not.

"Sale Pending" would mean that all the contingencies of a mutually-executed contract have been satisfied and, barring any unusual circumstances, both parties are just counting down the days to closing.

To be sure, it would always make sense to have your agent inquire as to the availability of that property or, if you don't have an agent representing you, call the listing agent yourself for further information.

~ June Cardinale
Equity Colorado
june.cardinale@equity-usa.com
0 votes Thank Flag Link Mon Mar 25, 2013
As you can see there is some variability in how people use the terms, and usage may also vary by region. In Denver, "Under Contract" is typically used with "regular" sales (not contingent on a 3rd party's approval as a short sale would be) - and it means everyone's agreed to terms and a contract is in effect. "Pending" is usually used in a short sale transaction and would indicate the seller has agreed to the offer, but the contract isn't in effect until the bank approves it (which makes sense, since they'd be selling for a loss). Our MLS has a separate field to indicate whether back up offers are being accepted - this may apply to either type of sale - so the use of "Pending" to indicate that is not so common here.

Usually the listing information will indicate if it's a short sale - certainly your agent would know, or you could try reaching out to the listing agent.

If you're looking for property in Denver, feel free to call, text or email and we'd be happy to chat.

Best,
Tony & Karen
720-427-4836
0 votes Thank Flag Link Mon Mar 25, 2013
I believe they both mean the same. Some agents just use different terminology
0 votes Thank Flag Link Mon Mar 25, 2013
I have to agree with Sean here and I completely disagree with the agents who say "Pending" refers ONLY to short sales or bank owned properties! That just isn't true. There are many "regular" sales (not a short sale, or bank owned) out there with a "Pending" status. It just means the sellers aren't willing to take any backup offers. Under Contract technically means there is an accepted offer, but sellers might consider a backup offer. If you see a property you're interested in and are unsure of the status, ask your Realtor!

Depending on what MLS you're seeing listings from, you may also see "Active/Backup" term used, which also means there's an accepted offer, but they are accepting backup offers.

Hope this helps!
0 votes Thank Flag Link Mon Mar 25, 2013
March 25, 2013

There is a slight difference between the two terms. " Under Contract" means that all points of negotiation;
price; closing date; possession; inclusions; exclusione; requested repairs or credits for deferred maintenance have been agreed upon by Buyer(s) and Seller(s). "Sale Pending" means that Buyer(s)
and Seller(s) are presently negotiating on any of the aforementioned points: Price; closing date; repairs
credits: etc. Both parties to the transaction are agreed upon the most important issues, Price, Terms and
Closing Date but may still be negotiating some more minor items.

Some Brokers consider "Under Contract" and "Sale Pending" to mean the same thing. Best to call the
Listing Broker to find out whether there is still and opportunity to obtain the property.

Stim Kennedy
Broker, CRS, ABR, NCE, SEC
stimson KENNEDY Realtors
Cell: 303 478.9494
0 votes Thank Flag Link Mon Mar 25, 2013
"Under contract" means the buyer and seller agreed on the terms of the sale and signed the contract.
"Pending" is a term recently created and refers to transactions, involving short sales and foreclosures, when the bank, the seller and the buyer verbally agreed on the contract terms, but the contract is pending bank's signatures. Banks usually take several days to get a contract processed, so the term "pending" covers that gap and lets buyers know, that there is an offer accepted, but not yet signed. In real estate transactions, verbal agreements do not carry any weight. So technically, until the seller, the bank and the buyer sign the contract, a property is technically available. However, due to the fact, that it is already in the process at the bank and they have a contract, that all the parties verbally agreed to, there is very little chance for a new offer to go through during this gap in time. But this is a subject for another discussion.

Marina Bay
Cherry Creek Properties
0 votes Thank Flag Link Mon Mar 25, 2013
Pending= Still waiting on final sign off of current offer or offers on the table.

Under Contract=An offer has been submitted and accepted by seller
0 votes Thank Flag Link Mon Mar 25, 2013
Pending = short sale or bank sale, usually distressed sale
Under Contract = individual seller, typically nondistressed sale
0 votes Thank Flag Link Mon Mar 25, 2013
Hi Edgc2!

"Sale Pending" is the term most often applied to short sales. In a short sale transaction it generally means the offer has been accepted by the seller of the property and submitted to the lien holder (the bank) for their approval. Until the offer is accepted by that lien holder the property stays in the "pending" status. Once the lien holder accepts the offer the contract to buy and sell becomes fully executed and the status changes to "under contract."

Let me know if I can answer any other short sale questions for you! Have a great week,

Marina Jensen
Realtor with Cherry Creek Properties
http://www.MarinaJensen.com
0 votes Thank Flag Link Mon Mar 25, 2013
Very much the same and often both are used to express the same situation. Pending describes the state of the sale process, under contract refers to the agreement between parties involved who are in some way contractually obligated which causes the pending sale.
0 votes Thank Flag Link Mon Mar 25, 2013
Under contract when a "normal" home sale is under contract. Pending is when a bank-owned home is under contract, waiting for bank approval. Julie Montgomery, Greenwood Village, http://www.jmontgomery.com
Web Reference: http://www.jmontgomery.com
0 votes Thank Flag Link Mon Mar 25, 2013
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