What Does ‘Pending’ Mean In Real Estate?
You’re preapproved for a mortgage and you’re on the hunt for your dream home. When you finally find a home that would be a perfect fit, you see that the home’s listing has the word “pending” attached to it.
What does this mean? Unfortunately, a pending offer on a home means that you will probably not get the chance to buy that property.
What Does It Mean When A House Is Pending?
When a home has a pending offer, it means that a buyer has made an offer that the property’s seller has accepted. The sellers and buyers are now just waiting to close the sale of the property, whether the buyer is making an all-cash offer or plans to finance the purchase of the home with a mortgage.
When a home is pending, you can no longer try to outbid another buyer for the property. Your chance to buy the home has most likely passed, unless the sale falls through, an unlikely but not impossible event.
Answer box: When a home sale is pending, it means that the sellers have accepted an offer from a buyer. The home sale will close once the buyers and sellers sign the paperwork that makes the sale official. Once a home is listed as pending, the odds are low that other buyers will get the chance to purchase it.
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Pending Sale Vs. Contingent: What’s The Difference?
You might see a home listing that is contingent. This is different than a pending sale in that a contingent home sale can only go through if a specific requirement is met.
For instance, buyers might make an offer on a home that the seller accepts. But the offer will also state that the buyers won’t close the purchase of the home until they sell their own home. Such offers are known as contingent offers. The home sale is contingent upon the buyers selling their own home.
You can put an offer in on a contingent home. If the home sale falls through, the sellers will then consider your offer. Not all contingent offers fall through, of course, but your odds of getting your offer in front of sellers are higher with contingent offers than they are with homes that are pending.
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Can You Put An Offer On A Pending House?
You can put in an offer on a home that is pending. But you can’t simply outbid the other buyer. When buyers make offers, they typically include language stating that the sellers, once they accept the offer, can’t cancel the sale even if they receive another offer at a higher price.
You can put in a backup offer, though. If the pending home sale falls through – which can happen if an appraisal comes in too low or the buyers can’t qualify for a mortgage – your offer will then become live. The home’s owners can then decide whether to accept it.
Can Real Estate Agents Still Show Pending Homes?
A home with a pending sale is still technically on the market. Because of this, real estate agents can show these homes to possible buyers. Most agents, though, won’t do this because most pending home sales do close. Showing a home that is pending, then, would usually be a waste of agents’ time. Many homeowners also don’t want to show their properties if they have a sale pending.
Although it varies, a pending sale usually takes from a few weeks to 60 days. During this time, buyers will pay for a home inspection, request any needed repairs, secure their financing and check the home’s title.
Do Pending Sales Ever Fall Through?
In rare cases, pending home sales do fall through. This means that there is always a chance – although usually a slim one – that you might get the chance to buy a pending home.
Here are some of the most common reasons why a pending home sale might not reach closing:
- Financials fall through: If the buyers can’t qualify for a mortgage to cover the cost and closing costs of a home, the pending sale will fall through. This is why many homeowners only accept offers from buyers who have already been preapproved for a mortgage loan.
- Failed home inspections: If a home inspection turns up serious problems, the buyers might walk away from the sale, removing their offer. Be careful, though: That same problem that scared away other buyers might be a costly one for you to address.
- Buyer’s remorse: If the buyers who made the offer suddenly experience buyer’s remorse – no longer wanting to take on the financial burden of buying the home – they might cancel the home sale even after their offer is accepted. This bit of cold feet is rare: Buyers usually take a financial hit, losing their earnest money deposit, if they back out of a sale after their offer is accepted.
- Low appraisal: After the buyers and sellers agree on an offer, the buyers’ mortgage lender will order a third-party appraisal to determine the current market value of the home. If the market value is lower than the agreed-upon sales price, an appraisal contingency could scuttle the sale. Say the sellers and buyers agreed on a sales price of $250,000. If the appraisal determines that the home is only worth $230,000, the lender will only loan the buyers that much money. To close the sale, the buyers must either provide $20,000 in cash or the sellers must lower their sales price. If neither happens, the pending sale will not close.
The Bottom Line
While you are allowed to make an offer on a pending home, it is rare that such an offer will turn into a sale. That’s why it’s best to focus on homes that haven’t already attracted offers. One way to boost your odds of landing a home is to get pre-approved for a mortgage before you start shopping. You can apply for a mortgage online with Rocket Mortgage® to start this process.
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