What Does Pending and Other Terms Mean in the Real Estate World?

Not Everyone Understands Our Lingo and Terms

We agents need to realize that not all consumers understand our language and when we post a property as Under Contract or Pending the public may be confused by the terms. For the general population here is what these and some other commonly used terms mean in the REALTOR® world.

UNDER CONTRACT- A buyer has made an offer and it has been accepted by the seller. This doesn't mean that the property is totally sold, it just means that steps are progressing toward a closing and the complete purchase. The seller determines if he wants to continue showing the property and taking back-up offers.

PENDING- This means the same thing as under contract. There may be contingencies such as financing that the buyer has to meet and remove before the buyer can buy the property. Again the seller decides whether to continue to allow showings and receive other offers.

SOLD- When you see a sold rider this can mean two things. It may mean that the house is under contract and the buyer looks strong and the agent is pretty sure it will close. The other meaning is that the property has closed and title has transferred to the new buyer. Don't assume it is a done deal when you see a SOLD sign.

IN ESCROW- This is a term used in many parts of the country meaning that a property is under contract and monies for the closing have been placed with an escrow agency. The escrow agency is it to collect all funds necessary so that title can be transferred to the new buyer and reconciliation with the seller is completed. Another term is OPENING ESCROW.

BACK UP OFFER- The seller has accepted an offer but is allowing other buyers to place their offers in case the accepted offer doesn't work out.

FIRST RIGHT OF REFUSAL- In Clarksville TN, this means an offer has been accepted and the Contract has some type of contingency. This is used in many cases where a buyer has an home to sell. The seller and buyer have agreed that the property remains on the market for sale and if another acceptable offer is tendered, the first buyer is notified to remove his contingency and proceed to close. If he is unable to close then his contract is terminated and the next acceptable offer moves into first place and toward a closing.

CLOSED- The is the term used to say that escrow has been satisfied and title has passed to the new buyers. This is when the property is definitely SOLD. A CLOSING is the signing and consummation of the loan process and when the seller transfers the title on the property by way of the deed.  

What Does Pending and Other Terms Mean in the Real Estate World?

NOTE: As a buyer or a consumer do not be reluctant to ask for an explanation of any term so you will fully understand the status of a property and whether it is available for showing or not.

 

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