What Does Pending Mean on a Real Estate Listing?

The real estate market uses specific terms to describe a property’s status. Understanding these terms helps buyers and sellers navigate the process, manage expectations, and make informed decisions.

Understanding the Pending Status

When a real estate listing shows a property as “pending,” it signifies that a buyer has submitted an offer, and the seller has formally accepted it. This means the home is no longer actively available for new offers, as a purchase agreement is in place. Despite an accepted offer, the sale is not yet finalized; the property has not officially changed ownership. The “pending” status indicates the transaction is progressing towards closing, but conditions must be satisfied before the deal is complete.

This status differs from “active,” where a property is openly available for showings and offers. It also stands apart from “sold,” which denotes that the transaction is fully complete, and ownership has transferred. While “under contract” is sometimes used interchangeably with “pending,” or may precede it, “pending” generally implies that most, if not all, contractual conditions have been met and the sale is closer to completion. For instance, some systems might use “under contract” when contingencies are still active, transitioning to “pending” once those contingencies are cleared.

The Role of Contingencies

Contingencies are specific conditions written into a real estate contract that must be fulfilled for the sale to proceed. These clauses offer protection to both buyers and sellers, allowing a party to withdraw from the agreement without penalty if certain terms are not met within a specified timeframe. During the “pending” phase, these contingencies are typically in the process of being satisfied or have already been cleared.

A common type is the financing contingency, which makes the sale dependent on the buyer securing a mortgage loan. If the buyer cannot obtain the necessary financing, this contingency allows them to cancel the contract and typically receive their earnest money deposit back.

Another protective measure is the inspection contingency, which grants the buyer the right to have a professional home inspection. Should the inspection reveal significant issues, the buyer can often renegotiate repairs, request a price reduction, or even withdraw from the deal and retain their earnest money.

Furthermore, an appraisal contingency protects the buyer and their lender by ensuring the property’s appraised value meets or exceeds the agreed-upon purchase price. If the appraisal comes in lower, the buyer may renegotiate the price, cover the difference, or exit the contract with their earnest money deposit intact. These conditions are necessary before the transaction can be finalized.

Implications for Buyers and Sellers

For prospective buyers, a “pending” status generally means the property is unavailable, as an accepted offer exists. However, it is still possible to make a backup offer, which can be accepted if the primary deal falls through. While the chances of a backup offer being accepted are often slim, it positions a buyer to be next in line. If a backup offer is accepted, the buyer typically provides an earnest money deposit, which is held in escrow, similar to a primary offer.

For sellers, a “pending” status means they are awaiting the satisfaction of contingencies before the sale can close. During this period, the property is usually taken off the active market, though some “pending” sub-statuses might indicate the seller is still accepting backup offers. Sellers remain financially responsible for the property, including mortgage payments, insurance, and utilities, until the closing date. Backup offers can provide a safety net, ensuring a smoother transition if the initial agreement does not materialize.

What Happens If a Pending Deal Fails

A “pending” real estate deal does not guarantee a sale, and transactions can sometimes fall through due to various reasons. If contingencies are not met, or if either party withdraws, the property’s status will typically revert to “active” or “back on market.” Common reasons for a deal failing include the buyer’s financing falling through, significant issues arising from the home inspection that cannot be resolved, or the appraisal coming in below the agreed-upon price.

When a pending deal collapses due to a contingency not being met, the buyer is generally entitled to a refund of their earnest money deposit. For example, if a financing contingency is in place and the buyer’s loan is denied, their deposit is typically returned. However, if a buyer decides to withdraw from the contract for reasons not covered by a valid contingency, they risk forfeiting their earnest money to the seller. Sellers may then relist the property, potentially considering any backup offers they received during the pending period.