When you`re in the process of buying or selling a home, you`re bound to come across some real estate jargon that you might not be familiar with. One such term is “under contract,” which signifies that a buyer and seller have agreed on the terms of a sale. However, there are two variations of this term that can lead to some confusion: “under contract pending” and “under contract option pending.” In this article, we`ll explore the differences between these two terms and what they mean for buyers and sellers.
Under Contract Pending
When a property is under contract pending, it means that the buyer has made an offer, and the seller has accepted it. However, there are still some contingencies that need to be met before the sale can be finalized. These contingencies can include things like a home inspection, appraisal, or financing. Until all of these contingencies have been met, the sale is considered to be under contract pending.
During this time, the buyer typically has a certain number of days to complete these contingencies and decide whether or not they want to move forward with the sale. If they`re not satisfied with any of the contingencies, they can walk away from the sale, and the property will go back on the market.
Under Contract Option Pending
Under contract option pending is similar to under contract pending in that a buyer has made an offer, and the seller has accepted it. However, there`s one significant difference: the buyer has paid an option fee for the right to terminate the contract within a specified period, usually three to ten days.
During this option period, the buyer can decide to terminate the contract for any reason and get their option fee back. This could be because they found a different property they like better, or they`re not satisfied with the property after a closer inspection. If the buyer decides to move forward with the sale after the option period, the property will move from under contract option pending to under contract pending.
Which is Best for Sellers?
From a seller`s perspective, under contract pending is typically preferred over under contract option pending. This is because under contract option pending essentially gives the buyer an option to buy the property, which means that the sale isn`t truly finalized until the option period has expired. This puts some uncertainty on the seller`s end, as they don`t know for sure if the sale will go through until that time has passed.
On the other hand, under contract pending means that the contingencies have been met, and the sale is much more likely to go through. This is a more secure position for sellers to be in, as they can start preparing for the transfer of ownership with more certainty.
Which is Best for Buyers?
For buyers, both under contract pending and under contract option pending have their pros and cons. Under contract pending may give them a greater sense of security, as it means that the sale is much more likely to go through. However, under contract option pending gives them the option to terminate the contract for any reason within a specified period, which can be valuable if they`re not entirely sure about the property.
Ultimately, whether a property is under contract pending or under contract option pending comes down to the buyers and sellers and how they negotiate the terms of the sale. As a buyer or seller, it`s important to understand the differences between these two terms and what they mean for you. By doing so, you can make a more informed decision about whether to move forward with a sale or look for other options.
