What Does ‘Pending’ Mean in Real Estate?

House hunting is hard enough. But, there is nothing worse than spotting the perfect home on your favorite home search site, falling in love, going to make the call to your agent, only to see PENDING next to it. Ugh!

Your next thought is how can you get around the pending status because you want the house and you want it now. This post will take you through what pending means in real estate and what you should do if you like a home in pending status.

Pending Meaning in Real Estate

When a property for sale is labeled as pending this means the seller has accepted an offer, and that all property specific contingencies have been met. For example, a common contingency on the property is inspecting the home. Pending status indicates this contingency has now been completed by the buyer.

However, pending status doesn’t mean sold. Think of pending status as meaning spoken for because that’s what it is.

Can You Make an Offer If a House Is Pending?

Yes, you can make an offer on a house that is in pending status. However, in most instances the offer will not be accepted.

First, you have a logistics problem. Home sellers do not typically continue showing a home once it is in pending status. Unless you saw the home when it was in active status, you may be making the offer sight unseen.

If you had seen the home previously or are comfortable making a sight unseen offer you can. Contact your agent. Upon getting your request to make the offer a wise agent will contact the listing agent on the property to see if there is even an opportunity to submit the offer. I have received those calls and have told agents before not to waste their time because we are set to close in just a day or two.

On the other hand, the seller may be willing to accept a back-up offer. This is even more likely to occur if the seller believes the buyer may not be able to close the deal.

Things That Can Stop a Pending Sale from Happening

More real estate transactions fall through than you would think. There are many reasons for a pending sale not to happen. In five short years and about 300 transactions I have seen a lot. Here are some of the things that can stop a pending sale from happening, and why you should continue pursuing a home that is pending.

Financing

The buyer’s mortgage getting denied can stop a pending sale from happening. Most homebuyers will be buying a home with a mortgage. If the mortgage is denied the home will go back on the market. Reasons for a mortgage denial include issues with debt-to-income ratios, credit issues, or not having enough funds to close. Financing issues is the second most common thing that can stop a pending sale from happening.

Home Inspection

Home inspection issues are the most common reason to stop a pending home sale from happening. Do not think you shouldn’t buy a home just because of an inspection issue on a home. Sometimes the buyer and seller just can not agree on how to complete the repair. What one buyer would not tolerate you might be fine with. Remember, there are lots of irrational people out there.

Appraisal

A short appraisal can stop a home sale from happening. A short appraisal occurs when the appraised value is less than the contract purchase price. If the buyer and seller can not compromise to close the gap the pending transaction will end, and the house will come back to the market.

Liens on the Home

Sometimes a lien is discovered on the home. If the seller was unaware of the lien or forgot about it the purchase price may not be enough to cover the cost of the lien. Liens can be cleared up at closing so the buyer purchases the home without that burden. But, sometimes the home needs to go back on the market and get a new buyer due to a lien on the home.

Judgments on the Buyers

Homebuyers who have been sued previously and have a judgment sometimes can not buy a home. Homebuyers tend to think these things will not show up, but they do. If a judgment is discovered against the buy and the buyer can not pay it off before closing the pending home sale will stop.

Unforeseen Circumstances

Life is a random walk. We are all trying to get through life without too many negative events. But, negative events do occur. Many negative events can occur that will stop a pending home sale.

A buyer getting sued or having a divorce proceeding filed against him or her can stop a pending home sale. If the buyer loses his or her job that will stop a home sale. So can a disability or illness. Worse yet, death. Yes, in my first five years of real estate transactions I have been in three deals where the buyer died days before closing.

Steps To Make An Offer On A Pending House

1. Have your real estate agent contact the listing agent to get an update on the pending transaction. If it sounds like it is going to close, you can still make the offer if you want.
2. Write your offer with your agent and have it submitted to the listing agent.
3. Be prepared to get no response.
4. If the deal falls through, expect a phone call about the offer you accepted and whether you would still honor it.
5. Don’t hold your breath. If you are in the market and still shopping for a home, continue looking at other homes. The odds are not in your favor to get the home that is pending.
6. If you make an offer on a different home and it is accepted, have your agent retract the other offer you made on the pending home if you left the timeline open.

Buyer’s Role in a Pending Sale

The buyer’s role in a pending sale is to make all reasonable efforts to complete the contingencies in the purchase agreement. Common contingencies include having the property inspected and obtaining a favorable commitment for a mortgage. Essentially, homebuyers need to work closely with their agent and lender to ensure they are meeting all of their deadlines regarding the home purchase.

If there are signs the buyer is not meeting his or her obligations the seller may try to terminate the transaction. This will help the seller get the property back on the market more quickly.

Seller’s Role in a Pending Sale

A home seller has a role to play in a pending home sale, too. First, the seller needs to maintain the property in the materially same condition as when the buyer made the offer. If something does break or damage occurs to the property the seller needs to notify the buyer. Secondly, the seller needs to give the buyer the opportunity to complete tasks at the property. This includes giving access to the property to complete inspections and the appraisal.

Conclusion

Not all homes in pending status will close. If you are serious about making an offer on a pending home, have your real estate agent contact the listing agent to learn if there is an opportunity for you to have your offer accepted as a back-up offer.

If you are hoping to buy a home in Indiana the Quadwalls Real Estate Team can help you. Take the first step and tell us more about what you are looking for. You can do this all online by clicking here to complete your Quadwalls HomeFinder Assistant today.

FAQ

How Long Do Homes Stay Pending for?

A home will typically be in pending status for 35 to 45 days. A home can be pending for more or less time, though.

Just How Often are Homes in a “Pending” Stage?

Most homes are in the pending stage only once. However, about 5% of pending homes see the deal fall through for some reason. Therefore, if a home you like is pending, continue to monitor the listing. Instruct your real estate agent to stay in contact with the listing agent.