Two others confirmed Pineda was out of the running. All of those people spoke on the condition of anonymity to discuss the matter. None shared any specific details about the breakdown.
D.C. and Seattle officials said they did not want to comment.
United is expected to expand its search next week by interviewing several new European candidates. The club has already spoken to many from Europe and Latin America but, until now, seemed inclined to hire someone with MLS experience.
Pineda, a former Mexican national team midfielder, has been an assistant with the Sounders for four seasons, helping them to three MLS Cup appearances.
Pineda, 38, was the second candidate offered the D.C. job. Last month, United was in talks with former New York Red Bulls coach Chris Armas, two people said, but hit multiple unspecified roadblocks.
One person said the cases dissolved under different circumstances. The salary offer was not an issue in the Armas talks, another said, and it’s unclear whether it played a part in the Pineda situation.
With Pineda and Armas out, the only two known candidates from MLS circles are United interim coach Chad Ashton and Philadelphia Union assistant Pat Noonan.
Ashton, a longtime assistant, took over in early October when Ben Olsen was fired after 10 seasons. United has not had any recent contact with Noonan, two people said.
Ashton, as well as goalkeepers coach Zach Thornton, are under contract in 2021.
The Athletic reported United has interviewed Manchester City assistant Rodolfo Borrell, and this week said the team was interested in Germany’s Alexander Zorniger. However, a person close to the team said there has been no contact with Zorniger since the start of the search.
Former Dutch star Clarence Seedorf, who most recently guided Cameroon’s national team, spoke with United officials early in the process, as well.
Steve Cherundolo, a former U.S. national team defender who has coached in German circles for six years, was on United’s initial search list but isn’t believed to be in contention because he has primarily worked with youth teams.
Toronto FC and Inter Miami are also in the coaching market. Armas is a top candidate for Toronto, MLSsoccer.com reported. Miami reportedly will hire former Manchester United defender Phil Neville, the English women’s national team coach.
The Los Angeles Galaxy this week filled its vacancy by hiring former Toronto boss Greg Vanney.
Teams typically have coaching staffs in place by now. But with MLS likely to delay the start of the season because of the pandemic, United believes it has additional time to work through the hiring process, two people said.