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Escrow, Pending Sale, and Contract Signed: Is there a Difference?

There are many specific stages of processing a real estate transaction. Unfortunately, when there are large scale investments and several parties included, it is rarely just ‘put money in bank’ and ‘move to home.’ Three primary stages can occur when you are buying a home that causes future confusion. Because of this phrasing, we have taken the time to separate the differences between Escrow, Pending Sale, and Contract Signed.


From the simplest residential closing to the most complex commercial real estate transaction, our law firm is committed to providing unmatched expertise and exceptional customer service.


What is Escrow

Escrow, by definition, means putting something, such as deed or money, in the custody of a neutral third party until conditions are met. These conditions could be both on the side of the buyer and the seller side.

Escrow is held for a majority of reasons. It is often seen as an act of good faith on behalf of the buyer. In times of negotiation, people put money on the line because flight risks are looked down upon. Keeping your money with an escrow shows that you have the capital and are willing to invest in the property. But it also acts as security to show that you mean business and your conditions should be met.

Finally, Escrow holders will typically be financial institutions and will often take anywhere from 3 to 6 percent of the purchasing cost.

What is a ‘Pending Sale?’

Pending sale CAN be about escrow proceedings. Often, ‘Sale Pending’ is solely for the people in the market of inquiry. A pending sale is meant for outside parties; meaning that contracts are being drawn up or ink is drying.

Sale Pending typically won’t be put up until either party’s contingencies are dropped. Often when there is sale pending it simply means that they are producing the funding to buy the home right then and there. Other times there will be contracts signed and awaiting processing funds.

However, it doesn’t hurt to ask. If you are a prospective buyer and truly set in this home, try to send the current homeowner a message of inquiry. If there are prolonged hold ups or if you think you can offer a better amount, then try it. The chances are low, but if you’re determined for that house, it isn’t breaking the contract to interact with other offers as long as there is no compromise.

How is Pending Sale different than Contract Signed?

Contract signed is the strange middle man in between pending sale and escrow. Essentially the process looks like this:

1: Negotiating contracts, establishing Escrow.

2: Agreeing to terms, contract signed.

3: Banks and attorneys agree, transfer funds, pending sale.

Contract signed means that the people who are trading the houses have personally agreed to their terms. However, attorneys and financial institutions need to ensure all of the specific information is present. Attorneys act in their partners best interests, and institutions ensure they are making sound investments.

Michael R. Kadoch, P.A.

We are a specialty real estate law firm, title closing and title related services P.A,  servicing Florida and primarily  south Florida from two locations since 2009 . That’s means that when you call us with a real estate matter you have called a real estate specialist  who knows the territory and who probably came across and dealt with similar matters like yours more than once in the course of time.   From the simplest residential closing to the most complex commercial real estate transaction, our law firm is committed to providing unmatched expertise and exceptional customer service. You should not compromise  the benefit of having a real estate  attorney looking after your interest when buying a real-estate property.

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