When Does a House Go Pending in Real Estate?

In real estate, a home’s status changes to “pending” once a seller has formally accepted a buyer’s offer. This signifies that the property is under contract, but the sale is not yet complete. The “pending” phase represents an intermediary period where various conditions must be satisfied before ownership can officially transfer.

Understanding the Pending Status Trigger

A property enters “pending” status after a seller accepts a buyer’s offer. Buyers submit offers, often leading to negotiations and counteroffers. Once both parties formally agree to all conditions and sign a legally binding purchase agreement, the listing transitions to “pending” in real estate databases.

This formal acceptance signifies a mutual commitment to proceed. The “pending” status acknowledges that the sale remains contingent on several subsequent steps and conditions being met. It also informs other potential buyers that the property is currently unavailable for new offers.

Key Stages During the Pending Period

Once a property enters “pending” status, the purchase agreement often includes several contingencies that must be fulfilled for the sale to proceed. These conditions protect both the buyer and seller, ensuring specific criteria are met before the transaction is finalized. The “pending” period is dedicated to addressing these contingencies.

Home Inspection Contingency

The home inspection contingency allows the buyer to hire a professional inspector to evaluate the property’s condition. The inspector identifies structural issues, necessary repairs, or safety concerns. Based on the report, the buyer may request repairs, a credit, a price reduction, or withdraw from the contract if significant issues are found and unresolved.

Appraisal Contingency

The appraisal contingency protects the buyer by ensuring the property’s value supports the loan amount. A licensed appraiser assesses the home’s market value. If it appraises for less than the agreed-upon purchase price, the buyer may renegotiate the price with the seller, pay the difference, or terminate the contract. Lenders typically require an appraisal to ensure their investment is secured by the property’s value.

Financing Contingency

The financing contingency is also prevalent, providing the buyer a specified period to secure the necessary mortgage loan. During this time, the buyer works with their lender to complete the loan application process, provide required financial documentation, and receive final loan approval. If the buyer is unable to secure financing within the agreed timeframe, they typically have the right to withdraw from the purchase agreement. This contingency is paramount for buyers who rely on a mortgage to complete the purchase.

Title Review

A title review is another important step undertaken during the pending period to ensure the seller has clear ownership of the property and can legally transfer it. A title company conducts a thorough search of public records to identify any liens, encumbrances, or disputes that could affect the property’s ownership. Any discovered issues must be resolved before the sale can close, guaranteeing the buyer receives a clear title free of unexpected claims.

Other Contingencies

Occasionally, other contingencies might be part of the agreement, such as the sale of the buyer’s current home. This condition allows the buyer to proceed with the purchase only if their existing property sells within a specified timeframe. These various contingencies highlight why the “pending” status is not a guarantee of a closed sale, as the transaction remains conditional upon their successful satisfaction or waiver.

Transition to a Closed Sale

After all contingencies outlined in the purchase agreement have been successfully met or formally waived, the transaction moves into its final stages. This marks the transition from the conditional “pending” status to the definitive act of closing the sale. The primary focus shifts to preparing the necessary documentation and facilitating the transfer of funds and ownership.

Final Loan Approval and Walk-Through

A significant step involves the final loan approval, often referred to as “clear to close,” issued by the buyer’s lender. This confirmation indicates that all underwriting conditions have been satisfied, and the loan is ready to be disbursed. Concurrently, the buyer typically conducts a final walk-through of the property, usually within 24 to 48 hours before closing, to ensure the home’s condition has not changed and any agreed-upon repairs have been completed.

Closing Disclosure Review

The buyer also receives a Closing Disclosure (CD) at least three business days before the scheduled closing date. This document provides a comprehensive breakdown of all financial aspects of the transaction, including the loan terms, estimated monthly payments, and all closing costs. Reviewing the CD allows the buyer to compare it with the initial Loan Estimate and understand the exact amount of funds required at closing.

The Closing Appointment

The actual closing appointment is where all parties sign the final legal documents, including the promissory note and deed of trust for the mortgage, and the deed transferring ownership. Funds are then transferred from the buyer’s lender and the buyer’s own accounts to the seller, and the title company records the deed with the appropriate local government office. Once these steps are completed, the sale is considered final, and the property’s status changes from “pending” to “sold.” Should any of the contingencies not be met, the sale may fall through, and the house could return to an active listing status.