Realtor Home ConnectionQ: What does it mean if a real estate yard sign says “Under Contract?” Is that the same as “Sale Pending?”

A: A home isn’t truly sold until what’s known as “a closing” where many documents are shared and signed and the title on the property changes hands. If you are the seller, then you will sign a purchase contract (or agreement) in which you commit to sell the property at the offered price and with specific conditions if the buyer meets his/her commitments. Buyers make their commitment by placing a deposit on the property and then taking certain steps to move toward a closing, like securing a loan and scheduling an inspection.

Home sales sometimes come with contingencies. Buyers may want to make a purchase contingent on selling another home, or on a satisfactory inspection, a negative Radon or soil test, or only if repairs will be made by the seller and similar restrictions. In signing the contract with contingencies, the seller commits to meeting these conditions. If they are not met to the satisfaction of the buyer, then the contract may be cancelled.

Buyers usually need to get financing to make the purchase. And so, that may be a condition of the purchase agreement, as well. If the financing were to fall through, then the contract would no longer be valid. Buyers will want a valid title to the property showing that there are no liens or other owners involved. Without a clear title, buyers are likely to walk away.

All of these situations – and more – make it appropriate for sellers to keep properties on the market even after they have accepted an offer and signed a contract. 

Under Contract simply means that a binding agreement between buyer and seller exists. Sellers may not enter into another contract with a different buyer and the buyer is obligated to purchase the property if all of the contingencies and conditions are satisfied. This is the first step in completing a purchase or sale.

Once all of the contingencies have been cleared, the sale becomes Pending, awaiting a clear title search and any other legal steps required by the state before a closing can take place.

While no other offers may be accepted by the seller after signing a contract, the property may continue to be shown in search of “back-up” offers. Many real estate transactions do fall apart – even at the last minute. A bad title, structural issues with the property that can’t be fixed, new conditions from the funder (e.g., mortgage company) and other issues could prevent the buyer and seller from completing the deal.

Sellers can protect themselves by continuing to keep the property available for showings during the Under Contract and Sale Pending periods. Again, the property is not actually sold until a completed closing.

Selling and purchasing real estate is a complex business transaction overseen by the Colorado Real Estate Commission. It would be advisable to work with a Realtor® to be sure that you have someone on your team who understands all of these requirements and is ethically bound by a code of ethics to serve you with honesty
and skill.

This article was provided by the Colorado Association of Realtors®. Additional information about buying and selling real estate is available at

By  Saul F. Rosenthal, Colorado Association of Realtors®