Estimated reading time: 7 minutes
If you’re looking to purchase a home and you’re browsing listings online, don’t give up on a property you love just because the status is listed as something other than “active.” While some buyers may scroll past a pending sale, you don’t have to throw in the towel just yet.
Let’s break down what a pending status means on a home for sale, what could cause the property move back to an active status, and whether you can still submit an offer.
There are various statuses for a listed home, such as active, under contract, pending, or closed.
An active listing is what people are most used to seeing when a home is listed for sale. Potential buyers are free to inquire about the property and make offers. When a home is under contract, both the buyer and seller have signed a purchase agreement, but the sale isn’t final or closed yet.
A pending status means the seller has accepted a buyer’s offer, but the deal has yet to close. Essentially, the property is in limbo between an active listing and being sold.
If you’re browsing listings online, you may notice a few different labels on a pending sale.
While the home seller accepted an offer, they are still accepting back up offers because of a snag in the final stages. Be sure to make a strong offer to stand out from other buyers!
The accepted offer is a short sale and must be approved by additional lenders or banks outside of the buyer and seller’s control. Because of this legality, the sale may be taking some time to process.
This status shows the seller is no longer showing the property and are confident the pending sale will go through.
As pending is a status between active and sold, the buyer’s mortgage lender and their underwriting team are kicked into high gear. It’s a time for all the last-minute details to be ironed out before closing. The home may temporarily move into escrow until the final paperwork is processed, including mortgage financing and title work. The buyer will conduct a final walkthrough with their Real Estate Agent, ensuring the home is in the agreed upon condition. Then, once everything is settled, both the buyer and seller will attend the closing.
When a property is contingent, it means the seller has accepted an offer, but the sale won’t be finalized before certain conditions are met. The seller may keep the property listed in case the conditions aren’t satisfied, causing the sale to fall through. A pending sale can occur because of a contingency, but they are not exclusive to one another.
When a property is under contract, it means both the buyer and seller have agreed to the contracted terms, but the contingencies still aren’t met. Typically, a property that is under contract is still technically on the market. If you’re interested, you can submit a backup offer for their consideration.
Even if a buyer is pre-approved with their lender, circumstances can change. The buyer may have a financial emergency, opened a new line of credit, or their lender found discrepancies or inaccuracies in their financial qualifications.
A buyer may include contingencies in their offer, which are conditions that must be met for the sale to go through. A common contingency is related to inspection results. This could include asking a seller to fix certain issues, such as foundation cracks, before closing.
If a property is at risk of foreclosure, a seller can enter into an agreement with their lender to sell the home for less than the remaining loan balance. This agreement, referred to as a short sale, allows the seller a chance to owe less debt. Even if the seller accepts an offer from a buyer, the lender has final say on the sale price of the home. If the lender does not approve of the transaction, the seller must put the home back on the market.
An appraisal is used to establish whether a property’s listing price is suitable based on its location, condition, and features in comparison to recent sales of similar properties. When a home appraisal comes back significantly lower than the asking price, the mortgage lender won’t approve the mortgage loan. A low home appraisal can happen if there has been a bidding war, which often pushes a home price far above the market level. With lack of lender funding, the sale cannot be completed unless the buyer chooses to fund the difference with their own money. If they can’t, the home is relisted for purchase.
The homebuying process can be emotional. A homebuyer may be going through a major life change that affects their priorities or just be having second thoughts. Whatever the reason, sometimes a buyer will decide not to purchase and the home will reenter the market.
In most situations, a buyer cannot submit an offer once a home is listed in the pending status. However, there’s a small chance that the seller may consider a backup offer.
If you’d like to submit an offer on a pending sale home, take your Real Estate Agent’s lead. They will most likely contact the seller’s listing agent to ask about the specifics of the deal, such as contingencies that are waiting to be cleared, how the inspection went, or any other problems that arose.
Express your interest with a formal backup offer letter. This will hold your place as a possible buyer. If the primary sale falls through, the seller can consider your contract instead.
Negotiations can help enhance your offer, especially if you include convenient terms for the seller. These terms help show the seller that you’re serious about purchasing the property. You could offer over the asking price, pay closing costs, or flexible moving dates. Including a pre-approval letter with an earnest money deposit can communicate that you’re ready to make a deal.
After you submit your offer, it’s the seller’s move. There isn’t much else you can do except wait. Experts advise it’s best to continue your search for the perfect home. This can help ease some anxiety and keep you from being fully invested, should you lose out with your offer.
After searching for so long, it can be disappointing to discover the home you love is a pending sale. However, pending doesn’t mean the sale is final. There’s a small chance the sale falls through and you have an opportunity to make an offer. Contact us to start a pre-approval, ensuring your mortgage financing is accurate and you’re ready to land your dream home.
Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.
“This website uses cookies to ensure the best user experience. By using our website you consent to all cookies in accordance with our Cookie policy.
Read More
.jpg)
