Mortgage 101
November 22, 2021

If a Home for Sale is Pending, Should You Still Put in an Offer?

Picture this: you’re browsing houses and find your dream property. It has everything on your must-have list and it’s in an ideal location. You see that the property is listed as a pending sale. Should you forget about it and move on? Not necessarily. Together, we’ll walk through what a pending sale means, the possible causes, and things you can do to improve your chances with an offer.

What Exactly is a Pending Status?

A property’s sale goes through three listing phases: active, pending, and sold. The active period is what you’re most likely used to seeing when a home is for sale. A pending sale status is an indication that the seller has accepted an offer from a buyer, but the deal has yet to close. Another way to think of a pending sale is that the property is in limbo, between active and sold.

If you find a house you really love and see that a sale is pending, we suggest still talking to your real estate agent about the property. Your agent will keep an eye on the property because there are various ways the closing could fall through, resulting in the house reentering the market.

What are Some Reasons a Home Could Reenter the Market After Pending?

Financial Fall Through

Even if a buyer is pre-approved for a mortgage loan, circumstances can change. A buyer might have a financial emergency, open a new line of credit, or a lender could find discrepancies and inaccuracies that change the amount originally approved for the buyer.

Home Inspection and Contingencies

A buy offer may include contingencies relating to a poor inspection. An inspection contingency could include asking the seller to fix certain issues, such as foundation cracks, or offer a discount to the asking price. If the seller doesn’t agree to the terms, the buyer can cancel the sale and the house goes back on the market.

Short Sale Failure

If a property is at risk of foreclosure, a seller can enter an agreement with their lender to sell the property for less than the remaining loan balance. This agreement, also known as a short sale, allows the seller a chance to owe less debt. As soon as the seller accepts an offer from a buyer, the house is listed as pending. However, the lender has final say on the sale price of the home, so they still need to approve the transaction after an offer is made and accepted. If the lender doesn’t approve, the seller has to put the house back on the market.

Buyer’s Remorse

Homebuying can be an emotional process. On occasion, a buyer goes through a major life change during the buying process that changes their situation, or perhaps they have second thoughts. Whatever the reason, sometimes buyers change their minds and a home reenters the market, giving you a chance to purchase it.

Low Appraisal

If the appraisal is significantly lower than the asking price, lenders often won’t approve the mortgage loan. This can happen because of a bidding war, which often raises a home price far above market level. If this happens, the sale cannot be completed, and the home will be available for purchase once again.

Are There Ways to Purchase a Home that is Pending?

Although it’s possible a pending sale can reach closing, there are still things you can do to increase your chances of consideration.

Let The Seller Know You’re Interested

If you’re really in love with the property, it never hurts to have your real estate agent reach out to the seller’s listing agent. This can help you gather more information about the home, its condition, and how likely it is to enter the market again. Your agent may also be able to find out more information about how many offers the home has and how eager the seller is to close. This investigation work can be helpful if the buyer decides to pull out of the sale.

Negotiate With the Seller

Don’t be afraid to be aggressive and include negotiations with your offer. Since the property already has at least one offer, try to make your offer as convenient for the seller as possible. You can make an offer over asking price, pay closing costs, or offer flexible moving dates. Including a pre-approval letter with an earnest money deposit can also show a seller that you’re more than ready to make a move. Be sure you make yourself available to your agent’s communications as pending sales can move on quickly to other offers.

Use a Personal Touch

Much like a cover letter on a resume, including a personal touch to the seller can make your offer stand out. Adding a letter that outlines why you want to purchase the property might put you a level above other market competition.

Now that you’re more informed about what pending sales are, why they sometimes fall through, and what you can do to increase your chances of purchase, we hope you’ll feel more confident as you move through the housing market. When you’re ready to discuss home financing, contact us to be put in touch with a knowledgeable Loan Originator who will help you with your unique needs.

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