What Does Pending Mean?
Imagine finding yourself browsing through online property listings and spotting one that immediately draws your attention, only to notice it's marked as pending. You may wonder, is it still up for grabs?
In real estate, a pending status signifies that an offer has been placed and accepted for the property, all prerequisites have been satisfied, but the transaction has not yet been sealed.
For those actively looking to purchase or sell a property, it's beneficial to understand what a pending status really means, its typical duration, and the scenarios under which a sale might not proceed.
Key Points to Consider:
A property listed as pending is close to completing the sales cycle.
It's common for properties to remain in the pending phase for about one to two months before the sale is finalized.
While a pending sale is nearing conclusion, there's still a possibility it might not be finalized. Hence, cautious consideration should be given before placing offers on such listings.
Understanding Pending Status:
When a house is marked as pending, it indicates the acceptance of an offer by the seller, with both parties having fulfilled their obligations under the agreed-upon contract.
A pending property is in the throes of the escrow and closing phases, which include finalizing the transfer of ownership, concluding the purchase, and executing all requisite documentation.
Contingent vs. Pending Explained:
The distinction between contingent and pending properties lies in the completion of certain stipulated conditions or contingencies by the involved parties.
For instance, a home under a contingent status might include an inspection contingency, allowing the buyer to withdraw if significant issues are uncovered during the inspection that the seller refuses to rectify. Once these contingencies are addressed, the property moves from contingent to pending status.
Duration of Pending Status:
The length of time a home remains pending can vary, depending on how swiftly the buyer and seller can conclude the closing process. According to the National Association of Realtors®, the standard pending period ranges from 30 to 60 days, though it may be influenced by factors such as mortgage approval and property inspections.
Why Pending Sales Might Not Close:
Even as a pending sale inches closer to finalization, several factors, including financing, appraisal values, or inspection outcomes, can disrupt the completion.
Financial Hurdles: Securing a mortgage is not a given. A buyer's inability to obtain mortgage approval necessitates the termination of the purchase.
Appraisal Discrepancies: Lenders are hesitant to finance more than the appraised value of a property. An appraisal falling short of expectations may lead to the sale's cancellation if a revised price agreement or additional payment is not feasible.
Second Thoughts: It's not uncommon for buyers to revisit their decision, potentially leading to the deal's dissolution.
Opting out of a deal post-contract might lead to the loss of the earnest money deposit and, in certain scenarios, legal repercussions for the buyer.
Offering on a Pending Property:
Though infrequent, it remains possible to place an offer on a pending property. However, without assurance that the seller is open to backup offers, it might prove unproductive.
Sellers often agree to contracts that prevent them from showcasing the home or accepting new offers, even more favorable ones. Additionally, sellers face legal ramifications for withdrawing from an agreement.
Focusing on a home with a pending status may not be the most strategic move. Prospective buyers are better served by broadening their search to include other listings, possibly uncovering the perfect property with a bit more research.
For those venturing into the market, arming oneself with the right questions to ask when considering a purchase can prove invaluable.
