Searching for a home to purchase can be thrilling! You find something that you love, but upon digging a little deeper for information, you see that the home is “active under contract.” So, you find another home that you love, but that home is “pending sale.” Frustrating!
What can be even more irritating is not understanding the difference between these two terms, since they both essentially mean that the home has been spoken for (at least for now). Home buying is usually a transaction that involves three different groups of people: the buyer, the seller, and the financial institution on the loan. In order for a deal to close, all three parties need to be satisfied before that can happen.
And this is where these terms come in. So, let’s take a closer look at what the difference is between homes that are active under contract and those that are pending sale.
What does active under contract mean?
This means that the buyer has made a formal offer on the property, and the seller has accepted it. The point of this period is for the buyer to conduct all of their due diligence, for the appraisal to be completed, and for the formal loan approval to be obtained. At any point in this process, as long as the particular contingency is in place, the buyer can cancel and have their deposit refunded. But, seller’s agents will still (and should) accept back-up offers on properties that are active under contract unless there is a clause preventing it. This is because it’s still possible for the sale to not go through at this stage. In fact, many agents will continue to show homes that are active under contract too, so you could get your foot in the door after all!
What does pending sale mean?
This means that the home is under contract and all contingencies have been removed. A pending sale is further down the home buying timeline than a property that is under contract. Many seller’s agents will not continue accepting offers on homes once they have gone pending.
Keep in mind that some real estate agents will use these terms interchangeably, which can be confusing for buyers. Sometimes the terms “contingent” and/or “option” will be used in their place. If you ever find yourself confused about any real estate terms, please ask for clarification. As a long time real estate agent, I am always happy to assist buyers and sellers in any way that I can!
If you have any additional questions about purchasing a home or about the Pasadena real estate market, please contact me. I’m a local real estate agent with decades of experience in the local market. I would love to assist you!