What Does Pending Mean for a House?
Demystify "pending" in real estate. Understand the journey from offer to closing, common hurdles, and what it means for your home buying or selling plans.
When a home listing shows “pending,” it indicates an offer has been accepted by the seller, and the transaction is moving towards finalization. While a significant step, “pending” does not signify a completed sale, as various conditions must still be met before ownership officially transfers.
Understanding the Pending Status
The term “pending” in real estate signifies that a legally binding contract has been signed between a buyer and a seller for the property. At this point, the home is no longer actively available on the open market for new offers.
This status is distinct from an “active” listing, where a home is still openly available for offers, or “under contract,” which can sometimes mean contingencies are still being worked through. Once a property moves to “pending,” it means that initial conditions or contingencies have been resolved, and the transaction is progressing towards the final closing.
Key Steps During the Pending Period
After a home enters pending status, several important procedural steps unfold before the final closing. One initial step involves the home inspection, where a professional evaluates the property’s condition. This typically occurs within a week or two of the offer acceptance, with the inspection itself lasting an average of two to four hours for a standard home. Following the inspection, buyers may negotiate with the seller for repairs or credits based on any issues discovered.
Concurrently, if the buyer is financing the purchase, their lender will order a home appraisal. This independent valuation ensures the property’s market value supports the loan amount. The appraisal visit can range from 30 minutes to a few hours. A financing contingency in the contract allows the buyer to withdraw without penalty if they cannot secure the necessary loan, often within 30 to 60 days.
Another step involves the title search and obtaining title insurance. A title company conducts a search to examine public records and verify property ownership, uncovering any potential claims, liens, or encumbrances against the property. Title insurance is then purchased to protect both the buyer and the lender against financial losses arising from undiscovered title defects.
Why a Pending Sale Might Not Close
Despite a home being in pending status, various circumstances can cause the sale to fall through before closing. One common reason is issues uncovered during the home inspection. If significant defects are found, such as foundation problems or roof damage, and the buyer and seller cannot agree on repairs or price adjustments, the buyer may choose to terminate the contract.
Another frequent cause for a pending sale to fail is related to financing. Even if a buyer has a pre-approval, their mortgage loan can still be denied if their financial situation changes, such as job loss, new debt accrual, or stricter lender guidelines. Additionally, if the home appraisal comes in lower than the agreed-upon purchase price, the lender may not approve the full loan amount, requiring the buyer to cover the difference or renegotiate the price with the seller.
Title complications can also derail a sale. Issues like unpaid property taxes, undisclosed liens, or errors in public records can create a “cloud on the title,” meaning there are legal claims against the property. If these title defects cannot be resolved, the buyer may not be able to obtain clear ownership, leading to the cancellation of the transaction.
What Pending Means for Other Interested Buyers
When a home is in pending status, it generally means it is no longer actively marketed to new buyers. However, it is still possible for other interested parties to express their interest. Some sellers may be willing to accept “backup offers” even when a property is pending.
A backup offer is a secondary contract that becomes legally binding only if the initial pending sale falls through. This offers a safety net for the seller, avoiding the need to re-list the home if the first deal collapses. For a buyer, submitting a backup offer can be a strategic move, positioning them as the next in line should the primary transaction not reach completion.