Can You Still Buy a House That Is Pending?

When a desirable home appears on the market, seeing its status quickly change to “pending” can be disappointing. While a pending status indicates an accepted offer, it does not always signify a finalized sale. Understanding this status and its possibilities can help buyers navigate a competitive real estate landscape.

What ‘Pending’ Means in Real Estate

In real estate, a “pending” status indicates that a seller has accepted an offer from a buyer, and the transaction is progressing toward its final closing. This means a legally binding contract is in place, and the property is no longer actively marketed for new offers in the same way an “active” listing would be. However, “pending” does not mean “sold”; the sale is not yet complete, and various conditions must still be met before ownership officially transfers.

The “pending” status often suggests that most, if not all, contractual contingencies have been satisfied, and the sale is nearing completion. Some listing services might use terms like “active under contract” to indicate that while an offer is accepted, the seller may still be open to backup offers. This distinction signals whether the seller is entirely confident in the current deal or keeping options available.

Submitting a Backup Offer

Even when a home is listed as pending, a prospective buyer can still express interest by submitting a backup offer. A backup offer is a legally binding purchase agreement that only becomes the primary contract if the initial pending deal fails to close. This arrangement provides a safety net for the seller, ensuring they have another buyer lined up without relisting the property and restarting the marketing process.

For a buyer, making a backup offer provides a strategic advantage, especially in markets with limited housing inventory. It positions them as the next in line if unforeseen circumstances cause the first contract to terminate. While there is no guarantee the primary deal will fall through, an accepted backup offer means the buyer is ready to proceed immediately if the opportunity arises.

Why Pending Sales Can Fall Through

Several common reasons can cause a pending home sale to terminate, creating an opening for a backup offer. Real estate contracts include specific conditions, known as contingencies, that must be satisfied for the sale to proceed. If any of these conditions are not met within the agreed-upon timeframe, the contract can be voided without penalty to the buyer, and their earnest money deposit is returned.

Financing Contingency

This clause allows the buyer to withdraw from the contract if they cannot secure the necessary mortgage loan within a specified period, often ranging from 30 to 60 days. Changes in the buyer’s financial situation or shifts in lending guidelines can lead to loan denial, preventing the sale from closing.

Appraisal Contingency

If the property’s appraised value comes in lower than the agreed-upon purchase price, lenders will typically not finance the difference, creating a funding gap. This contingency permits the buyer to renegotiate the price with the seller, pay the difference out-of-pocket, or withdraw from the contract.

Home Inspection Contingency

After a professional inspection, which typically occurs within 7 to 14 days of contract acceptance, significant issues like structural damage or major system failures may be discovered. If the buyer and seller cannot agree on repairs or a price adjustment, the buyer can cancel the contract.

Title Contingency

Title contingencies protect buyers from issues with the property’s legal ownership, such as undisclosed liens, errors in public records, or boundary disputes. A title search is conducted to ensure a clear title can be transferred, and if problems cannot be resolved, the buyer may terminate the agreement.

Sale of Buyer’s Home Contingency

This contingency allows a buyer to exit the contract if they are unable to sell their current residence within a specified timeframe, preventing them from carrying two mortgage payments simultaneously.

The Backup Offer Process

Engaging in the backup offer process requires careful preparation and adherence to specific steps. First, consult with a real estate agent who can advise on local market conditions and help determine an appropriate offer. Securing a strong pre-approval for financing is also a prudent step, as it demonstrates financial readiness to the seller.

Crafting the backup offer involves preparing a complete purchase agreement, similar to a primary offer, detailing the proposed price, terms, and all relevant contingencies. This includes the earnest money deposit, typically 1% to 3% of the sale price, which demonstrates the buyer’s serious intent and is held in an escrow account. The offer should clearly state that it is a backup offer, indicating it will become active if the primary contract terminates.

Once submitted, the seller can formally accept the backup offer, placing it in “first position.” If the initial deal falls through, the backup offer automatically transitions into the primary contract. The buyer’s agent will then notify them of this change, and the standard closing process, including satisfying all contingencies outlined in the backup offer, will commence.

What to Do While a Home is Pending

For a buyer who has submitted a backup offer or is monitoring a pending property, maintaining an active approach to their home search is advisable. Relying solely on a backup offer can lead to missed opportunities, as the probability of the primary sale failing varies and is not guaranteed. Continuing to view other properties and explore options ensures progress in the homebuying journey.

It is also important to stay prepared for a potential shift in the property’s status. This includes keeping financing pre-approval current and being ready to move quickly if the backup offer becomes active. Regular communication with a real estate agent is essential for receiving updates on the primary contract’s progress and any changes in the property’s availability. If a backup offer has been made, reviewing its terms and timeline periodically helps ensure understanding of the commitments and potential next steps.