What does pending mean in real estate? Basically, it means that a property is under contract and the buyer and seller have agreed on everything and are ready to sign the contract. Unlike a contingent sale, where a home remains on the market for some time until a buyer makes a higher offer, a pending listing means the property is not available yet. In other words, it is currently awaiting settlement.
There are two kinds of statuses in real estate: under contract and pending. Depending on where the contract is signed, either one can be a good indication of a pending transaction or an under contract sign indicating a home that is off the market. You should know the differences between these two terms before you begin your search. Make sure that you are aware of the differences between these terms so that you can determine which one is right for you.
While a pending sale presents a much narrower path to success, it is still possible to make a good offer. Often, a pending listing is marked “pending – taking backup offers” on a property’s listing. In these cases, a buyer or agent can approach the seller’s agent to make a backup offer. In such a scenario, both the buyer and seller will be notified and are given the same opportunity.
Contingents are different than pending sales. A contingent listing is not officially closed until the contingencies are fulfilled. The buyer’s offer is subject to certain conditions. Most home purchase contracts have several contingencies. Often, these concerns are related to mortgage approval, appraisal, and home inspection. Having a pending sale means that the initial buyer has cleared the contingencies, but that doesn’t mean that the transaction is final. Contingents give potential buyers a longer shot at a house they have their eye on.
Whether a pending sale is a backup or a final sale, a buyer’s offer must meet certain conditions in order for the sale to be finalized. However, if the contract is pending, the buyer cannot legally back out of the sale. Even if the buyer makes a better offer within the first two days, the seller is not allowed to accept the higher offer. The National Association of Realtors reports that nearly seven percent of purchase agreements will be terminated before the close of the sale, with 21% of them being due to inspection issues and 11% to financing problems.
Under contract, the buyer and seller sign a contract, but there are still many issues that need to be resolved before the deal can close. If the buyer fails to close on the deal, the buyer can back out and walk away. Therefore, it’s best to read the contract very carefully and make sure it contains all the necessary information. This way, there are less chances of a deal falling apart and everyone involved can get their desired house.