No, the title of this post is not a mistake. This is the exact search phrase someone used that brought them to one of my real estate websites. So let’s see if we can get this question answered for the researcher.

“Under contract” or “pending” are terms used for real estate on which a buyer and seller have agreed to the terms of a sale. It means that a contract to purchase has been executed and that the home is most likely no longer available.

When a home goes under contract, there are usually a number of different contingencies that are stipulated in the contract that must be resolved before the transaction is closed. The most common contingencies in a purchase contract for residential real estate are the inspection contingency and the financing contingency.

The inspection contingency usually stipulates that the buyer can inspect the home for a specific period, and if the cost to make repairs to certain items exceeds a specific dollar amount, the buyer can walk away, unless the seller agrees to make some repairs. The financing contingency usually stipulates that if the buyer, using good faith, cannot secure financing by a set date, then that buyer can cancel and walk away.

The fact that a property is “under contract”, does not necessarily mean that it will sell. Homes that have been under contract often go “back on the market” due to the previous agreement being canceled.

But for the seller, going “under contract” essentially takes the home out of the market. Homes that are in “pending” status in the Tampa MLS database will not be displayed on Realtor.com and other public home search sites, and they won’t show up in MLS searches done by Realtors, unless they are searching the “pending” status homes.

If you are looking for a home, it’s best to have your Realtor keep tabs on the “pending” homes that may fit your needs. “Pending” often changes to “back on the market” or “active”, and your dream home may just fall into someone else’s hands.

Sellers often solicit offers even after going under contract with a prospective buyer. The seller may not have much confidence in the primary contract and may seek to enter into a “backup” contract in case the primary contract fall through. Most listings agreements that sellers sign with their brokerages provide that the brokers still present offers that are received even after having signed an agreement with a prospective buyer.

So keep your eyes on the “pendings” as well as the “actives”. The smart buyer realizes that being in the second position, is better than having no position at all.