So you found a home online that you love, but the status says ‘Pending.’ What does that mean exactly? Could the home still be yours? Or maybe you’re the one selling a home and you’ve gotten to this stage. Can you rest easy knowing it’s a done deal? 

The home buying and selling process can be complicated – though working with a professional real estate agent takes a lot of confusion out of the process. One of the most puzzling features is the pending sale. 

What Does Pending Sale Mean?

Put simply, ‘Pending’ means that a buyer submitted an offer and the seller accepted. It is sometimes also shown as ‘Active Under Contract.’

Pending, when it comes to a real estate transaction at least, is the term used when the property has made it through all of the steps of the closing process… yet hasn’t yet closed. Agreements have been made; contracts have even been signed. Contingencies should have been met, and everything required by escrow should have been fulfilled. 

The home is basically sold, but the deed and title haven’t passed on yet, so the sale is not final. 

That’s right — pending sales are not final. That’s why it’s important for you to fully understand this real estate term and how it might affect you whether you’re the buyer or seller. 

A pending sale usually means that the buyer is locked in. All contingencies will have supposedly been met, but there can be exceptions. Contingencies themselves may continue to hold a house hostage. A sale may remain in this status if contingencies, especially financial contingencies, are preventing it from closing.

Pending Can Be Scary for Sellers 

A pending sale does not always mean the deal will close quickly. This may take up to several weeks or more. There is no universal timeline, and contingencies can hold things up.

And pending sales can — and do — fall through for any number of reasons. There are a range of contingencies that may keep a pending sale from being seen to completion. For example, if the home doesn’t pass inspection (and there was an inspection contingency) buyers may remove themselves from the deal. Or a buyer could get caught in a deal selling their existing property.

The most common reason for pending sales to go awry is financial. Buyers may be forced to leave this type of sale if there is a problem with their mortgage application. The pre-approval letter isn’t a guarantee that a mortgage will be granted, and if anything changes with the buyer’s financial circumstances between the issuance of the letter and when the buyer looks to close on their offer of a property, they can still be denied having the loan granted.

Pending sales can also terminate simply because the buyer decides to walk away. This isn’t common, but it can and does happen, so sellers should be aware. It will cost buyers their earnest money deposit, but buyers can remove themselves from a pending sale for any reason.

It Can Be a Boon for Buyers 

So despite the vast majority of pending sales moving on to closing, you can see that no deal is final until a property has been closed on. This means that, properties pending sale may be worth looking into.

It is possible to make an offer on a home that is a pending sale. Sometimes agents will even give clues that the seller will still entertain offers, like labeling a home as ‘active with conditions’ or ‘active continue to show,’ though this doesn’t always happen, so look to your real estate professional for advice on submitting offers for these types of homes. 

In the event a seller is entertaining subsequent offers during a pending sale, there is no reason an interested buyer can’t submit an offer.  Just know they can’t be looking for higher offers; they may only be interested in hearing other offers in the event the first plan falls through. But there can be advantages to being next in line if the original deal fails! 

As a reminder, seeing the status of ‘Pending’ on a home sale really just means that the home is in the process of selling. It is well on its way to closing, but by no means is it final. Any number of things can impede a home’s sale and there is still plenty of room for things to go wrong. 

But because several things can get messy on either end of a deal, List With Elizabeth is here to make sure you are not only familiar with the transaction process but have a trusted agent preparing you to get from Listed to Sold!