What Does Pending Mean in Real Estate?
Demystify the "pending" status in real estate. Learn what this critical transitional phase means for your property transaction.
When a property listing shows “pending,” it means an offer has been formally accepted, and the property is under contract. This status indicates a significant stage in the homebuying process, moving the property closer to a finalized sale.
Understanding Pending Status
A “pending” status means the seller has accepted an offer, and the property is under contract. Unlike an “active” listing, which is available for offers, a pending property is off the market. “Sold” status means the transaction is complete and ownership transferred. Some listings may show “pending: continue to show,” indicating backup offers are considered.
The transition to pending occurs after contingencies are met or waived. The pending phase lasts 30 to 60 days, especially with mortgage financing. Cash purchases can be shorter, sometimes one to two weeks.
Key Activities During the Pending Period
The pending period involves the buyer’s due diligence before finalizing the purchase. Key activities include:
- Home inspection: The property is professionally examined for defects. This contingency provides a timeframe to assess the home’s condition. If significant issues are discovered, the buyer can request repairs, negotiate a price reduction, or withdraw from the contract without losing their earnest money deposit.
- Appraisal: Especially if the buyer is securing a mortgage, the lender requires an independent appraisal to ensure the property’s value supports the loan amount. An appraisal contingency protects the buyer, allowing renegotiation or termination if the appraised value is lower than the agreed-upon sale price.
- Financing contingencies: These ensure the buyer secures the necessary mortgage loan within a specified timeframe. If loan approval falls through, the buyer can exit the contract without penalty.
- Title search: This verifies the seller’s ownership and identifies any liens or claims against the property. This search ensures the buyer receives a clear title, free from unforeseen financial obligations or ownership disputes.
- Earnest money deposit: The buyer provides this deposit, held in an escrow account, to demonstrate intent to purchase. This deposit is applied towards the down payment or closing costs at closing.
What Happens Next with a Pending Property
Once contingencies are met, the transaction proceeds to closing. At closing, legal documents are signed, funds transferred, and ownership passes from seller to buyer.
A pending sale can “fall through,” terminating the contract and returning the property to active status. This occurs due to unresolved inspection issues, a low appraisal, or failed financing. If a sale falls through due to an unmet contingency, the buyer receives their earnest money deposit back.
Some sellers entertain backup offers. A backup offer becomes primary if the initial pending sale fails to close. This provides a safety net for the seller. Interested buyers can inquire about submitting a backup offer through their agent, especially if the listing shows “pending: continue to show.”