Real Estate 101: Under Contract Versus Pending

Venturing into the real estate notary area can be a simultaneously thrilling and scary activity, particularly because of the myriad terms used there. Under Contract Versus Pending are such terms; they are often seen as synonyms, but they represent different conditions in a real estate deal. The aim of this guide is to explain these terms so that they are understandable and transparent for buyers and sellers in the real estate market.

Understanding Under Contract Versus Pending in Real Estate

Let’s start by deciphering the key differences between under-contract and pending. While they may sound similar, they represent different stages in the real estate journey.

Distinguishing Between Under Contract Versus Pending

“Under contract” is what we call a property when a buyer and a seller agree on the sale terms, thus creating a legally binding commitment to carry out the transaction. To put it more vividly, it is like changing the status of your relationship to “officially taken” on social media.

On the contrary, a property is “pending” when the sale is almost done, and only the last formalities are left. An engagement in a relationship is a good comparison for this period – it’s a positive commitment with a little more preparation to go.

Understanding “Under Contract” in Real Estate Transactions:

1. What does “under contract” signify? It means that the purchaser and seller arrived at an agreement of the sale, and a contract is signed and is binding.

2. What is the scope of the process? The buyer is engaged in the process of deciding whether to buy by ensuring that the property is worth buying, performing the property inspection, getting the appraisal, etc.

3. Seller and Buyer Obligations: All parties to a deal are charged with the particular accomplishment of their obligations, like the buyer completing the mortgage approval for provisional sale and the seller removing the agreed-upon contingencies.

Exploring the “Pending” Stage in Real Estate Transactions:

1. Meaning: A “pending” status means the sale has almost completed, usually with no disruptions.

2. Final Steps: The final stage of a property that has reached the sale involves securing the necessary funds and dealing with any last-minute inspections or repairs.

3. Potential for Falling Through: Despite being close to completion, pending sales can still collapse due to unforeseen circumstances.

Last but not least, it’s critical to remember that a sale that is pending is not guaranteed to be one. There is be a certain level of probability that the deal could be no more due to situations that were not foreseen. It’s like being the butterflies in your stomach just before the wedding ceremony—happiness mixed with a little bit of worry.

In-Depth Comparison: Under Contract Versus Pending

Now that we’ve covered the basics, let’s dive deeper into the nitty-gritty details of under-contract versus pending. Specifically, let’s explore the vital role contingencies play throughout the real estate process transaction.

1. Contingencies: These are conditions in the purchase agreement that must be fulfilled for the sale to proceed. They act as a safety net for buyers, allowing them to inspect the property and secure financing.

2. Buyer Protection: Contingencies offer buyers an exit strategy if the property doesn’t meet their expectations or if they can’t secure a loan.

3. Seller Transparency: Addressing repairs or modifications upfront can build trust and ensure a smoother transaction.

The Role of Contingencies in Real Estate

Contingencies are vital safeguards in real estate, included in the purchase agreement to ensure smooth progression of the sale. They cover various aspects, such as financing approval, satisfactory inspections, and property appraisals, acting as protective measures for both parties.

How Contingencies Benefit Buyers and Facilitate Due Diligence

For buyers, contingencies are a powerful tool. They allow thorough property inspection, necessary repairs, and financing security without risking earnest money. For sellers, contingencies offer transparency and foster trust, ensuring a smoother transaction.

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Contingencies in Inspections, Repairs, and Financing

Contingencies play a significant role in inspections, repairs, and financing. They enable buyers to understand the property’s condition fully, request repairs, and secure financing, providing a safety net throughout the process.

Using Contingencies as a Negotiation Tool

Contingencies are also valuable in negotiations, allowing buyers to request repairs or price adjustments based on inspection findings. For sellers, addressing repairs proactively can prevent last-minute negotiation hurdles.

Simplifying the Real Estate Purchase Process

To streamline your real estate journey, consider these tips:

1. Get mortgage pre-approval to understand your budget.
2. Collaborate with an experienced real estate agent.
3. Research and visit properties that fit your criteria.
4. Be proactive in inspections and repairs.
5. Stay organized with documents and communications.

Streamlining the Real Estate Sale Process

For sellers, ensure a successful sale by:

1. Pricing the property correctly.
2. Enhancing curb appeal and staging.
3. Marketing the property effectively.
4. Being flexible for showings.
5. Responding promptly to offers.

Frequently Asked Questions About Under Contract Versus Pending

Now that we’ve covered the ins and outs of under-contract versus pending, let’s address some common questions that often arise during these stages.

Average Duration of a Property Under Contract Versus Pending

Such a frequently asked question: How long will it take the property to sell? Many people are still confused as there is no definite answer. It depends, quite often on the 30 to 60 days mark , and is affected by market status and the level of complexity of the deal.

Nevertheless, remember that this is not always the case. It’s like looking at your best friend’s watch, and you know time is running, but still, they are not yet there, and you can’t guess how much time it left.

Possibility of Accepting Backup Offers While Under Contract Versus Pending

Imagine that your property is already under contract, and you might be having the first thoughts about your beach house. However, an additional offer is being made. What will be your move?

Moreover, it is a condition that personal interaction should be helpful and honest.

Indeed, it is fully up to the seller to get the green light to give a backup offer a nod or not. In a way, it is just like participation in a high school dance—on occasion, there are several candidates who are paying you their compliments, and the decision is all yours how to handle the situation in a proper and smooth manner.

Buyer’s Ability to Back Out of a Contract During the Under Contract Stage

Life usually goes as planned, but sometimes it goes contrary to concerns. Yet, if you are a buyer willing to pull out of a contract during the under-contract stage, how should you go about it?

Buyers can take a step back if they find that the conditions of the deal are not satisfied, but they must also be aware of the contract’s terms.

However, you should always check the specific terms and conditions of the contract to understand the implications of retracting. You would be bailing out of a roller coaster ride before it starts—sure, it is fun only in the beginning, and afterward, you change your mind because it was terrifying.

Potential for an Under-Contract Versus Pending Sale to Fall Through

Although it may still be bailed out, the sale is at the final stage when the finish line is visible but there is a risk that the deal falls through. In fact, even in the pending stage, the sale may fail to proceed.

The reasons are the problems from the assessment, the impossibility of financial and the changes in the buyer’s life.

It is disappointing when a pending sale fails, but one needs to opt for the bright side and keep on going. There are still many new ones yet to come.

Signing Documents Online Using BlueNotary

Now that you have got the knowledge about the difference between under contract and pending, let’s find out what new this tool, BlueNotary has and in how many ways it can be simpler for you to sign the documents.

You can use the BlueNotary service to quickly and securely fill out essential legal paperwork for real estate from your computer at any time you need it. You do not need printing, signing, and scanning at all. You can just click a few times and you are done!

BlueNotary is a real game-changer for any buyer, seller, or real estate professional as it gives them an upper hand in closing the deal and secures a smooth transaction. It feels like having a personal secretary with you all the time, all you have to do is to tap on the mobile screen, and they will cover you with the signatures.

Right now you learned the difference between under contract and pending, the contingencies are no longer covered in the fog, and you got it all to make your journey in the property easy and fun. With such understanding, you are certainly able to explore the intricate world of property transactions with confidence. The best of luck with your buying or selling transactions, my dear friends!