What Does It Mean Pending in Real Estate?

When a property is listed as “pending” in real estate, it signifies that a seller has accepted an offer from a buyer. This status indicates a purchase agreement has been signed by both parties. While an agreement is in place, the sale is not yet finalized, as various conditions must still be met before ownership officially transfers. This status indicates the property is under contract and progressing towards closing.

Understanding the Pending Status

The “pending” status means a property is officially “under contract.” This occurs after a seller accepts a buyer’s offer and both parties execute a purchase agreement. The property then transitions from an “active” listing to “pending” to reflect this commitment.

This status informs other potential buyers that the property is no longer actively seeking offers. However, the completion of the sale is not guaranteed. The pending period is dedicated to fulfilling specific conditions outlined in the purchase agreement, which must be satisfied before the transaction can close.

Common Contingencies in a Pending Sale

A pending sale often includes various contingencies that must be resolved for the transaction to proceed.

An inspection contingency allows the buyer to hire a professional home inspector to evaluate the property’s condition. If issues are found, the buyer can negotiate repairs with the seller or withdraw from the contract.

A financing contingency protects the buyer if they cannot secure a mortgage for the agreed-upon amount. This means the buyer is not obligated to purchase the home if their loan application is denied.

An appraisal contingency ensures the property’s appraised value meets or exceeds the purchase price, protecting the buyer and lender from overpaying for the asset. If the appraisal comes in low, the buyer may renegotiate the price, cover the difference in cash, or terminate the contract.

A sale of current home contingency allows a buyer to make their purchase conditional on the successful sale of their existing property. If the buyer’s current home does not sell within a specified timeframe, they can exit the contract without penalty. Should any of these contingencies not be met or waived, the purchase agreement can be terminated, potentially returning the property to an active listing status.

What Happens After a Property Goes Pending

Once a property goes pending, several procedural steps commence to move the transaction toward closing. The first step involves opening escrow or title, where a neutral third party holds all funds and documents related to the sale. The buyer deposits earnest money, a good-faith deposit ranging from 1% to 5% of the purchase price, into this escrow account. This deposit demonstrates the buyer’s commitment and is applied toward the down payment or closing costs at settlement.

Following the earnest money deposit, the buyer schedules and conducts the home inspection, as permitted by the inspection contingency. If a financing contingency exists, the buyer formally applies for their mortgage, and the lender initiates the appraisal process to determine the property’s market value.

Concurrently, a title search is performed to verify clear ownership and identify any liens or encumbrances on the property. Title insurance is also secured, protecting both the buyer and the lender from future claims against the title. The Real Estate Settlement Procedures Act (RESPA) requires lenders to provide detailed disclosures about these costs to borrowers. Finally, a final walkthrough is conducted shortly before closing to ensure the property’s condition has not changed, and then all closing documents are prepared for signing and ownership transfer.

Distinguishing Pending from Other Listing Statuses

Understanding the difference between “pending” and other listing statuses clarifies a property’s availability. An “active” listing means the property is currently on the market and available for offers, with no accepted contract in place. Buyers can view and make offers on active properties.

A “contingent” status indicates that a seller has accepted an offer, but the sale is dependent on specific conditions being met. While similar to pending, a contingent status implies a higher likelihood of the deal falling through due to a less certain condition, such as the buyer needing to sell their existing home. The distinction can be subtle and vary by region, but “pending” suggests that major contingencies are either satisfied or are expected to be resolved imminently, making the deal more firm.

Finally, “sold” or “closed” signifies the completion of the real estate transaction. At this point, all conditions have been met, funds have been disbursed, and ownership has officially transferred from the seller to the buyer, concluding the process. These distinctions are important for potential buyers to monitor the market and understand the availability of properties.