What Does Pending Mean in Real Estate

If you spend time looking at online listings of Champions Gate homes for sale, you’ve probably experienced the disappointment of seeing your dream home listed as “pending.” But does that mean all hope is lost?

A pending description means an offer has been accepted, but it is not a guarantee that the deal will go through. You can keep an eye on the listing and look for opportunities to swoop in if the listing remains available.

What “Pending” Really Means

A listing will be changed to “pending” when the homeowner has accepted an offer from a buyer. This means they may have negotiated on a price and other terms, and both parties have decided those terms are acceptable. There will be a contract executed that states the price, conditions, possession date, and anything else they discussed. When this happens, the home will move to “pending” status, and no offers can be submitted.

During this period, the buyer will be completing due diligence and submitting the offer to their lending institution in order to get final approval for their loan. This usually means they will need to complete an appraisal on the house as well as an inspection.

The conditional period is usually between 5 and 14 days long. The seller may still conduct showings during this time in case they need a backup offer. However, they cannot accept any other offers, with the exception of a backup offer. This would say that if the initial offer falls through, a certain buyer would be next.

Types of Pending Statuses

Depending on the platform you’re using, you may see different forms of a pending status that tell you more about what is happening.

Pending-Taking Backups: the seller is open to accepting backup offers in case the first one does not end in a sale.

Pending- Release/Continuing to Show: contingencies have been met, but there is a clause still in effect that could end the deal, and the buyer will still show the property and accept offers.

Pending- Do Not Show: the seller is no longer showing the house or accepting additional bids.

Pending- Over 4 Months: the pending listing has been going on for at least 4 months and likely has a tentative close date.

These may be phrased slightly differently but will equate to the same meaning. The important thing to note is that if you see release, taking backup, or continuing to show, you may still have a chance at that home.

Is “Pending” the Same as Contingent?

In some places, a pending status and a contingent status will be used interchangeably, while other markets will use them differently.

When they are used separately, a pending status implies that all contingencies have been met. An offer can be accepted only if certain things happen, such as:

  • An inspection shows no problems.
  • An appraisal comes back at an appropriate amount.
  • The intended buyer is able to sell their home in a certain time period.

When a status is “contingent,” there may be different rules on whether a home can be shown or not. Once all contingencies have been satisfied, the home will move to “pending.”

Why a Pending Sale May Fall Through

Not all homes will move from the pending status to being sold. There are a number of reasons the sale could fall through, placing the house back on the market. These would be opportunities for you to put in a new offer or reasons a backup offer may be accepted.

A Failed Inspection

If a home inspection yields unfavorable results, the pending sale may not continue. During this inspection, an expert will tour the home and record everything that may need repair or replacement. These results are presented to both the buyer and the seller.

Most offers include a clause that allows the buyer to cancel the purchase if the inspection shows serious problems with the home. But before taking that step, they may ask the seller to fix the issue or discount the price to accommodate. If an agreement isn’t reached, the house will usually go back on the market.

Failure to Secure Funds

In some cases, a buyer may have the entire amount of the purchase in cash, but most people will need to secure a mortgage. If they are not able to come to an agreement with a lending service, it would prevent a sale from going through. Some reasons a buyer may fail to secure a mortgage include:

  • A financial emergency that means the buyer needs to drain their down payment funds.
  • The mortgage lender could discover inaccuracies in the buyer’s application that changes the amount they were pre-approved to borrow.
  • The lender may believe the buyer is trying to use a loan for their down payment, which would nullify a funding offer.

Short Sale Failure

A short sale is a circumstance in which the seller agrees to sell their home in order to avoid foreclosure. The bank agrees to accept less money than the owner owes, under the condition that they sell the property. Once the sale goes through, they would transfer the entirety of the money to the lender in exchange for having their debt removed.

In a short sale, the lender must approve the home’s final selling price. A lender can review the accepted offer and decline the amount, forcing it back onto the market.

Appraisal Mismatch 

In order to provide a mortgage, a bank requires an appraisal that shows the house is priced at a fair market value. This protects the bank from making a bad investment and protects the buyer from purchasing a house that is not fairly priced. An appraisal will be performed by a neutral party who is trained in determining the value of a house based on local markets and the home’s size. If the buyer agrees to an offer price and the appraisal reveals that the house is not worth near that amount, they will usually have the right to pull out of an offer.

Buyer’s Remorse 

An offer being accepted is meant to be binding but doesn’t mean the buyer can’t pull out. If they decide they are no longer interested or have a change in circumstances, they can cancel the sale. A buyer who loses their job or needs to relocate for work may decide to pull out of the purchase.

How to Make an Offer on a Pending Home

The process of putting an offer in for a pending home is different than the traditional process on an open home, but it can be done with the following steps.

Be Sure You Want the Home 

If a pending sale falls through, it’s very possible it could be because of a problem with the home or the price. The seller may or may not be holding showings when the home is pending, so you will not always be able to see the home. If you want a home badly enough, this may be okay, but it’s important to explore all options and be sure you are committed to the home.

Connect to the Listing Agent 

Your real estate agent should be able to contact the seller’s listing agent to learn more about any contingencies, problems with the sale, or what the seller may be looking for in a backup offer. They can share with the listing agent that you are interested so that you remain on their radar.

Get Pre-Approved.

Before submitting any offers on a home, you should have pre-approval for a mortgage. This is different than a pre-qualification and will require you to submit information around your personal finances and assets. While a pre-qualification letter is helpful, a pre-approval letter will have a much stronger influence on an offer being accepted and will make the process go quicker.

Submit a Backup Offer 

Your real estate agent can help you craft a backup offer to submit to the seller, which they will consider if the current pending sale falls through. It is common for these offers to be more aggressive, considering there is already an open offer on the home. You may offer more money or fewer contingencies to have the best chance of acceptance.

Some tips for forming an appealing backup offer include:

  • Include strong financial backing. If a pending sale falls through due to a lack of a mortgage, the seller may be particularly sensitive to your own funds. Include a copy of your pre-approval and an earnest money deposit to improve your chances, as well as other financial information.
  • Write a “love letter.” There is an emotional aspect to selling a home, and many sellers will be more open to an offer from someone that feels relatable to them. Including a short note about who you are, how you would use the home, and why you love it can set you apart from other offers.
  • Stay involved. Ask your real estate agent to stay in touch with the listing agent on a home. This way, if the sale falls through, the listing agent knows to quickly contact you and how.
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