What Does Pending Mean in Real Estate?June 15, 2022
This is one of the most frequently asked questions in real estate and the short answer is: if a house that you love is pending, don’t lose hope. You still can be the buyer.
Imagine you are looking for a property and among numerous researches you finally find the house of your dreams. Right spot, the number of rooms you were looking for and an affordable price.
No doubts, your first thought would be to close the deal, right? But, what if this property is pending? What does it mean and how would this affect your purchase?
Understand what pending means and how it can affect you.
What does pending mean in the US?
Are you too late or do you still have a chance?
Pending sales, at least the property ones, represent properties who succeeded in all closing steps, but still weren’t settled.
Deals were reached, papers were signed, contingencies were met and everything necessary for the deposit was done; what is left is the closing itself. Which means, pending sales aren’t final.
No deal is final until the property is closed, which means it might be worth digging the pending properties.
A quick summary is: the pending sale differs from the contingent one, because, when it’s pending, the owner accepted the offer, but the deal wasn’t closed.
When it’s pending, it can be bought again – for example, if it fails the inspection or the buyer won’t be able to buy the property anymore, it goes back on sale.
Pending doesn’t mean sold.
And this is just because, until the contract is signed and the deal is closed, you are still able to negotiate your dream house, and there’s more room for negotiation than you could ever imagine.
Why can a pending sale fall through? Five things to consider
Of course brilliant sales fall through and those unfinished ones cannot go through for several reasons. Here are some scenarios that can lead to it:
Unexpected Events: Unexpected events can interrupt sales, for example, a buyer may withdraw from the deal if the home fails an inspection process, or if they do not feel confidence in the seller.
Buyer waiver: Buyers can waive pending sales for a variety of reasons, but in this case they will forfeit the down payment they offered.
Financing Failure: Mortgage problems are the most common reason when referring to a pending sale. That’s because even if a buyer receives a pre-approval letter and makes an offer, their loan could still be declined.
As we have seen, many problems can arise and so it is very important to familiarize yourself with the negotiation process to ensure that a great sale is not lost.
Can a pending sale be re-registered?
Yes! Pending sales can return to the market and that doesn’t mean there is something wrong with the property, as some people think. In some cases, the house may have been repossessed by unreleased financing, as we have already mentioned.
In a competitive market, however, realist properties often go unnoticed, which can be an advantage if you think about it.
Can I place an offer on a pending home?
You can, but you won’t necessarily get the house, you’ll just be at the front of the line if the deal doesn’t work out.
What does contingent status mean?
A property listing with contingent status means that the seller has accepted the offer, but closing the property is conditional on meeting certain conditions.
There are many different types of contingencies, such as
When buyers visit a home they want to buy, it usually looks good at first glance, so they make an offer. However, a trained professional, such as a home inspector, may find items in your home that are in need of repair or damage. This is where the test contingency clause comes in.
Inspection contingency provisions protect buyers by allowing them to obtain professional reports from home inspectors.
- Financing Contingencies
Financing contingency clauses are useful to protect buyers in the event that they are unable to obtain financing.
After your loan is pre-approved, you still need to be approved for a specific loan program and go through what they call the underwriting process. This is usually where the sale declines.
- Valuation Contingencies
This is a contingency that goes hand in hand with a funding contingency. Basically, the house needs to be valued at fair market value before the bank can write a check against it.
- Property contingencies
Owners can hire a bond company to conduct a thorough search of public records to ensure there are no issues with the title and if there are any, buyers can decline to purchase.
Difference between a contingent and pending sale
The main difference is that the pending status means the house is no longer active. Contingent status, on the other hand, means the home is still active and allows the seller to receive more offers from potential buyers.
That is, understanding the mysteries of a pending sale is critical as it is an unavoidable aspect of the real estate market. Be aware of contingencies and contracts as you go through each transaction to ensure the process runs smoothly.
Remember, pending sales are not final, which means you should use this information wisely.
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