What Does Pending Mean in Real Estate?

Understanding Real Estate’s “Pending” Status

When a real estate listing transitions to “pending,” it signifies a significant stage in the home sale process. This status indicates that a seller has accepted an offer from a prospective buyer, and both parties are actively working towards finalizing the transaction. While an agreement is in place, the property is not yet officially sold, and several steps must occur before ownership can transfer.

The “pending” status often follows an “under contract” or “contingent” phase. An “active” listing remains available for showings and offers. An “under contract” listing means an offer has been accepted, but specific conditions, known as contingencies, still need to be satisfied. A “contingent” listing implies that the sale is conditional upon factors, such as the buyer securing financing or selling their current home. Once all contingencies outlined in the purchase agreement have been met, the listing typically moves to “pending,” suggesting the deal is progressing smoothly toward closing.

Key Activities During the Pending Period

The period when a home is listed as “pending” is filled with several important procedural activities that move the sale toward its conclusion. One of the initial steps is the home inspection, where a qualified inspector evaluates the property’s condition. This inspection typically takes between two to four hours, with the detailed report often delivered within one to three business days.

Following a satisfactory inspection, or after negotiating any necessary repairs or credits, the appraisal process begins. A professional appraiser assesses the property’s fair market value, a step typically required by mortgage lenders to ensure the loan amount does not exceed the home’s value. The cost for a home appraisal usually falls between $300 and $500, and this process can take about a week or less to complete. The appraisal directly impacts the buyer’s financing, as lenders will only approve a loan up to the appraised value.

Simultaneously, the buyer’s financing undergoes a thorough review process known as underwriting. During underwriting, the mortgage lender verifies the buyer’s income, credit history, and the property’s value to approve the loan. This comprehensive verification typically takes between 30 to 45 days. A title search examines public records to confirm legal ownership and identify any claims or liens against the property. A title search can take anywhere from a few hours to several weeks. This search precedes the acquisition of title insurance, which protects both the buyer and the lender from unforeseen issues with the property’s title.

Implications for Buyers and Sellers

For sellers, a “pending” status means they have a signed contract and the sale is nearing completion, which generally involves minimal additional work unless unforeseen issues emerge. However, even with a pending sale, sellers can often consider and accept “backup offers.” A backup offer is a legally binding contract from another buyer that moves into primary position if the initial deal falls through for any reason. This strategy provides a safety net, ensuring the property does not need to be re-listed if the first transaction does not close.

For buyers, the pending period requires active participation in fulfilling contractual obligations, such as coordinating inspections and providing necessary financial documentation for loan approval. Buyers should anticipate potential scenarios where a pending sale might not proceed to closing. Common reasons for a sale to fail include issues arising from the home inspection, the appraisal coming in lower than the agreed-upon price, or the buyer facing challenges in securing financing. If the buyer’s offer was contingent on selling their current home and that sale falls through, it can jeopardize the pending transaction, potentially allowing a backup offer to proceed.