What Does Pending Mean in Real Estate?

Pending is the status of a real estate property that has a signed purchase agreement between the buyer and seller. This means that the seller has accepted an offer from the buyer, but the sale has not yet been finalized. There are still a few steps that need to be taken before the sale can close, such as the buyer obtaining financing and the home inspection being completed.

Common reasons for pending status in Real Estate

  • Buyer’s financing falls through: This is the most common reason for a pending sale to fall through. Buyers may be able to get pre-approved for a mortgage, but they may not be able to get final approval once the underwriting process begins. This can happen for a variety of reasons, such as job loss, changes in credit score, or unexpected debt.
  • Home inspection reveals major issues: During a home inspection, the inspector may find major problems with the property, such as structural damage, mold, or electrical problems. These problems can be costly to repair, and the buyer may decide to back out of the sale if the seller is unwilling to fix them.
  • Appraisal comes in lower than purchase price: The appraisal is an estimate of the home’s market value. If the appraisal comes in lower than the purchase price, the buyer may not be able to obtain financing for the full amount of the purchase price. In this case, the buyer may either need to make up the difference in cash or back out of the sale.
  • Buyer can’t sell their existing home: If the buyer is selling their existing home in order to purchase the new home, they may not be able to close on the new home until their existing home sells. If the buyer’s existing home does not sell within the contingency period, the buyer may need to back out of the sale of the new home.
  • Title issues: A title search is done to identify any liens or other encumbrances on the property. If the title search reveals any title issues, the sale may be delayed or even fall through.
  • Home is not insurable: Lenders require that the home be insured before they will approve a mortgage. If the home is not insurable, the sale may not be able to close.
  • Buyer or seller gets cold feet: Sometimes, either the buyer or the seller may simply get cold feet about the sale. This can happen for a variety of reasons, such as personal circumstances or changes in the market.
  • Paperwork errors: There is a lot of paperwork involved in a real estate transaction. If there are any errors in the paperwork, the sale may be delayed or even fall through.
  • Unexpected delays: Sometimes, unexpected delays can occur during the pending period. For example, the buyer or seller may need to travel out of town or there may be a delay in obtaining financing.
  • Force majeure: Force majeure is a legal term that refers to an event that is beyond the control of the parties involved in a contract. Examples of force majeure events include natural disasters, wars, and pandemics. If a force majeure event occurs during the pending period, it may give either party the right to terminate the contract.

How long does a sale typically stay in pending status?

The amount of time a sale stays in pending status can vary depending on a number of factors, such as the type of financing the buyer is using and the complexity of the transaction. However, most sales will close within 30-60 days after going into pending status.

What happens during the pending period?

During the pending period, the buyer and seller will work with their real estate agents to complete all of the necessary paperwork for closing. This includes the following tasks:

  • Obtaining a mortgage (if applicable): If the buyer is financing the purchase of the home, they will need to work with their lender to obtain a mortgage. This process can take several weeks, so it is important to start this process early in the pending period.
  • Scheduling a closing date: The buyer and seller will need to agree on a closing date, which is the day when the sale will be finalized and the buyer will take ownership of the home. The closing date is typically scheduled within 30-60 days of the home going pending.
  • Approving the title report: The buyer will need to review the title report, which is a document that shows who owns the property and any liens or encumbrances on the title. The buyer will need to approve the title report before closing can occur.
  • Scheduling a home inspection: The buyer will need to schedule a home inspection to identify any potential problems with the property. The buyer may negotiate with the seller to have some of the problems fixed before closing.
  • Negotiating repairs: If the home inspection reveals any major problems with the property, the buyer and seller may negotiate to have the repairs made before closing. If the seller is unable or unwilling to make the repairs, the buyer may choose to back out of the sale.
  • Obtaining final approval from the lender: Once the buyer has obtained a mortgage and the title report has been approved, the lender will need to give final approval for the loan. This process can take a few days.

What can buyers and sellers do during pending status?

Once a contract is signed, both the buyer and seller have certain obligations to fulfill. For example, the buyer is responsible for completing any necessary inspections and appraisals. The seller is responsible for providing the buyer with all required documentation and completing any agreed-upon repairs.

Differences between Pending and Contingent

Pending and contingent are two different statuses that a real estate property can be in. Contingent means that the seller has accepted an offer from the buyer, but there are certain conditions that need to be met before the sale can close. These conditions are called contingencies. Common contingencies include:

  • Financing contingency: This contingency allows the buyer to back out of the sale if they are unable to obtain financing.
  • Appraisal contingency: This contingency allows the buyer to back out of the sale if the appraised value of the home is lower than the purchase price.
  • Home inspection contingency: This contingency allows the buyer to back out of the sale if the home inspection reveals any major problems with the property.

Once all of the contingencies have been met, the sale will move to pending status. This means that the sale is likely to close on schedule, barring any unforeseen circumstances.

Can a Sale Fall Through After the Property Is Pending?

Yes, it is possible for a sale to fall through after the property is pending. This can happen for a variety of reasons, such as:

  • The buyer is unable to obtain financing.
  • The appraisal comes in lower than the purchase price and the buyer is unable to make up the difference.
  • The home inspection reveals major problems with the property and the buyer decides to back out of the sale.
  • The buyer or seller changes their mind about the sale.
  • If the sale does fall through, the earnest money deposit that the buyer put down will typically be returned to them.

Tips for buyers and sellers during pending status

  • Stay in communication. It is important for buyers and sellers to stay in communication during pending status. This will help ensure that any problems are resolved quickly and that the sale stays on track.
  • Be flexible. Things don’t always go according to plan during real estate transactions. It is important to be flexible and willing to work with the other party to resolve any issues that arise.
  • Be patient. Closing on a home can take time. It is important to be patient and to understand that the process cannot be rushed.

Conclusion

Pending status in real estate is a positive sign, but it is important to remember that the sale is not yet finalized. There are still a few steps that need to be taken before the closing date, and there is always a chance that the sale could fall through.

Frequently Asked Questions (FAQ)

What does it mean when a buyer is pending?

A pending buyer is a buyer who has made an offer on a property and the seller has accepted the offer. However, the sale is not yet final because there are still some contingencies that need to be met. These contingencies can include things like financing approval, home inspection, and appraisal.

Does pending mean complete?

No, pending does not mean complete. The sale is still in progress and there is a chance that it could fall through if any of the contingencies are not met.

How long does a pending transaction take for a house?

The length of a pending transaction can vary depending on the specific circumstances. However, it typically takes around 30-60 days for a home sale to close.

What is the difference between pending and accepting backup offers?

When a seller accepts a backup offer, it means that they have accepted an offer on their property from a second buyer, but the first buyer still has the opportunity to close on the sale. If the first buyer backs out of the sale, then the seller will move on to the backup buyer.

What does backup pending mean?

Backup pending means that the property is currently pending with another buyer, but there is a backup offer in place in case the first buyer backs out.

What does pending back up mean?

Pending back up means the same thing as backup pending.

What does it mean if something is pending?

Pending means that something is in progress and has not yet been completed. In the context of real estate, it means that the sale of a property is in progress but has not yet closed.

What happens after pending?

After pending, the buyer and seller will need to complete all of the remaining contingencies in order to close on the sale. This can include things like getting financing approval, completing the home inspection, and getting the appraisal completed. Once all of the contingencies have been met, the buyer and seller will sign the closing documents and the sale will be complete.

How long will pending take?

The length of time that a property is pending can vary depending on the specific circumstances. However, it typically takes around 30-60 days for a home sale to close.

Does pending mean already paid?

No, pending does not mean already paid. The buyer will typically pay the seller at closing, which is the last step in the home buying process.

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Jean Folger

Jean Folger brings over 15 years of expertise as a financial writer, specializing in areas such as real estate, investment, active trading, retirement planning, and expatriate living. She is also the co-founder of PowerZone Trading, a firm established in 2004 that offers programming, consulting, and strategy development services to active traders and investors.

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