07 Oct What Does Pending Mean In Real Estate?
Picture this: you’re on the hunt to buy a home, you’re scrolling through Zillow, and you find your dream home. You open it up to check out the details and you see PENDING in glaring letters. Seeing the word, “pending” might feel soul-crushing, but what does it even mean, anyway?
Pending doesn’t mean sold. When a home is listed as “pending” on a real estate website, it means that the seller has accepted an offer on a home from a buyer. “Pending” does not mean you should give up, and we’ll tell you why.
Market Overview of American Real Estate
Recent data on the housing market is indicating that it’s returning to pre-Covid levels.
The exodus from cities into the suburbs during the pandemic prompted a plunge in inventory, and a rise in cost due to the lack of availability of building materials, which made home prices and competition skyrocket. As the inventory drought starts to wane, prices will start to stabilize.
What Does Pending Mean in Real Estate?
A home is listed as pending when a buyer has submitted an offer that the seller has accepted, but the sale hasn’t been completed and ownership has not yet been transferred from the seller to the buyer.
While the offer has been accepted, no money has been transferred yet, and a formal real estate transaction has not yet occurred.
Until all the paperwork is finalized, the home is still technically on the market, even if it’s listed as pending. Most pending sales do end up going to closing, but in some instances, deals will fall through for a variety of reasons which include failure to find a mortgage, a short sale failure, a poor home inspection, or the buyer changing their mind.
A buyer changing their mind is rare and usually happens after extenuating circumstances because if a property has even reached the pending stage, it’s usually indicative that the buyer is serious.
Can I Still Purchase a Pending House?
Buying a home that’s already listed as pending is difficult, but not impossible. Most offer letters include a clause that explicitly states that the seller cannot cancel the sale if a higher offer comes in.
In order to consider a better offer, the buyer will have to cancel the sale first. You may even be able to view the home, even if it’s pending unless the seller has expressed that they don’t want to allow more showings.
Your real estate agent would need to contact the seller’s agent to see if scheduling a viewing is possible.
If you have serious interest in buying a home that is pending, you can submit a backup offer for the seller to consider in the event that the current pending deal falls through. However, most agents don’t recommend this, as it’s highly unlikely to work out in your favor. It’s possible and it does happen, but it doesn’t happen often.
It’s important when putting an offer on a property that is pending that you do your research and be 100% sure you have the desire and the means to purchase this home.
Your agent will get in touch with the listing agent to discuss the status and condition of the property and gain insight as to whether or not the sale might fall through. In the event the sale does fall through, you want the listing agent to know who you are and that you are interested.
What Does Under Contract Mean?
When a property is “under contract,” it means that a seller has accepted a formal offer, but the sale hasn’t been finalized because of contingencies that need to be met.
Basically, it means that the seller is willing to consider the offer. A pending sale is closer to being finalized than one that is under contract, and property under contract is more likely to fall through and go back on the market than one that is listed as pending.
Sales typically depend on contingencies, and common contingencies include the buyer’s inspection, financing, and appraisal. If any of these contingencies are not met, a property will go back on the market.
Are you wondering how to make an offer on a house? If so, check out this guide!
Frequently asked questions
- What is the difference between contingent and pending in real estate?
A property might be listed as “active contingent” which is another early stage in the sale. It means that an offer has been accepted from a buyer, but there are some conditions that still need to be met (such as financing). During the contingent period, the buyer can still cancel the contract without sacrificing their deposit.
- Can a pending sale fall through?
Yes, it can happen. It’s rare, but it does happen.
- Is it worth looking at a house that is pending?
If this is the home of your dreams and you’ve done the research and gotten pre-approved, it won’t hurt to look at it or submit a backup offer in the event the current contract falls through, but we wouldn’t advise getting your hopes up. Pending sales do fall through, but not frequently.
- Can you outbid a pending offer?
Most contracts state that the seller cannot cancel if they get a higher offer from someone else. Just bid what you would have bid on the property anyway if it wasn’t pending.
- Can a seller back out of a pending sale?
Yes, especially if a buyer cannot secure financing.
- Can a realtor show a house that is pending?
They can, but it’s usually up to the discretion of the seller. If a house is pending, the seller may no longer allow more showings.
- Can a seller accept another offer while under contract?
Yes, during this stage in the transaction, sellers are more willing to consider or accept backup offers due to any number of contingencies not being met.
Get In Touch
While a home listed as “pending” is close to being finalized, there is a chance it could fall through. While it’s more likely to happen in the earlier stages, pending sales do get canceled from time to time.
If you are seriously interested in a home that is pending, your best course of action is to get in touch with the listing agent and submit a backup offer in the event that the current sale is canceled.
Learn more about home buying, home improvement, and short-term rentals at nestrs.com!