What does “Pending” Mean in Real Estate Listings?
You’ve been looking and looking, scouring the real estate listings for days. Then you find it. The perfect home. But you notice one little word that can send your hopes crashing to the ground. It’s the word “pending.” Even if you don’t know what “pending” means in real estate, you know it can’t be good.
Fortunately, the word “pending” in a listing may not be as bad as you think. Let’s take a look at what “pending” means in real estate and what it means for your future purchase.
What Does Pending Mean in Real Estate?
When you see the word pending in a real estate listing, it means that the seller has accepted an offer made on the home. The offer can be pending on any number of contingencies or for other reasons, so it is worthwhile to check with the seller’s real estate agent to find out.
A sale that is pending is closer to closing than sale that is under contract. That means if the home is under contract, there is a better chance it won’t go through and you can put in an offer to buy the house.
Can You Buy a Home That is Pending?
There is always hope of buying a home up until the sale closes. However, most offers on a home include a clause that the seller can’t cancel the sale of the home if someone comes in with a higher offer. The best you can do is put in a backup offer, just in case the pending sale falls through.
However, this is not usually recommended by real estate agents because the chances are slim that the sale won’t go through and you are better off putting your energy and finances into a more promising prospect.
Can a Pending Home Still Be Shown?
Despite the above information, a home that has sale pending can still be shown. It is technically still on the market until closing. If the seller allows it, your agent can still show you a home that is pending. However, they may not want to go through the hassle of showing their home anymore. Have your agent find out from the seller’s agent if a showing is possible before making plans to see it.
What Causes a Pending Home Sale to Fall Through?
There are, of course, a few reasons why a pending sale in real estate could fall through. These include:
- The house doesn’t pass inspection – Most offers include a clause that states a buyer can pull out of the purchase of a home if there is a major issue found during a home inspection and the seller won’t take care of it or adjust the price of the home. If this happens, keep in mind that you would then be putting in an offer on a home with a serious issue, and you may need to reconsider your offer carefully.
- The buyer cannot secure financing – Another clause that is typically written into the offer is the contingency that the buyer can pull out if they can’t secure financing. If this happens, you can put in an offer. This situation can be really advantageous if you know that you can secure a first mortgage at or around the previous pending price.
- Failure of a short sale – A short sale is when a home is sold because the seller cannot make their mortgage payments. In this situation, the lender has to approve the sale, and during this process the sale will be listed as pending. If the lender refuses a sale on the home, you can put in an offer.
- Buyer’s remorse – In some situations, a buyer has to pull out of buying a house because their life circumstances change, such as job relocation, which means they can no longer buy. If this happens, they have to cancel the sale and you can then put in an offer on the house.
None of these situations happen often. For this reason, it is important to understand that it is not easy to buy a house when the sale is pending. However, if you do end up putting an offer in on a pending sale, you need to do the following:
- Be certain you really want the home. Go to a showing, if the seller allows it.
- Get your real estate agent to contact the seller’s agent. This may allow you to express your interest to the seller and find out more about the existing contract.
- Get preapproved for a mortgage so you can prove to the seller you are able to finance the purchase.
- Put in a backup offer so the seller has it to consider while waiting for the sale to go through. If the sale falls through, your offer may be accepted right away. Not sure what to offer on the house? There are some resources out there to help you determine, but the safest bet is to offer a higher price or ask for fewer contingencies.
In addition, if you make an earnest money deposit and stay in touch with the seller’s agent, you will stay on the seller’s radar. This gives you the best possible chance of getting your offer accepted if the pending sale fails to go through.
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