Looking at home sales but coming across many pending listings? When you’re buying a home for the first time, its always important to know a few phrases and terms in real estate. So let’s help you out with this one!
What does a pending listing mean in real estate?
A home listing as ‘pending’ means that sellers have accepted the offer, but the transaction is incomplete. Basically, both the buyer and the seller have to take steps to officially close the sale.
Quick note: Accepting an offer is only the first step to close a transaction.
So what happens next?
The buyer will submit the offer to their lender in order to finalize their financing, and then transfer earnest money and other upfront costs to an escrow account. The seller may also have to meet certain criteria, also known as contingencies, in order to officially sell the home. Most often, the buyer and seller are able to take these steps in a timely manner and close on the home in a few months, but sometimes, the sale falls through. So, until the transaction actually closes, the sale is listed as pending.
Why do you still see a pending listing online?
At the pending stage, a seller has only accepted an offer; a lot more has to happen before the home is officially sold, where legal ownership of the home has been transferred from the seller to the buyer. But a lot has to happen beforehand, so sellers keep their home on the market to avoid re-listing all over again if the sale falls through.
Quick note: Keep in mind that the MLS listings you see online may not be updated in real time. A home that’s listed as pending may actually be fully off the market. Speak to a real estate agent before taking any initial steps.
A home listing that’s pending isn’t sold yet so buyers can still make backup offers if the sellers are accepting them. This is usually the point where the “SOLD” sign goes up, though.
What are the different types of pending listings?
- Taking backups: The seller is still accepting backup offers in case their first one falls through.
- Continuing to show: The seller has likely accepted a contingent offer and will be willing and able to replace that offer with one that doesn’t come with contingencies attached.
- Do not show: The seller is particularly confident in the offer they accepted and is no longer showing the home.
- Pending four months: A listing that has been pending for four months or more and likely is near a closing date.
When is a pending sale listed as a contingent?
A home sale is often pending while both buyers and sellers work to meet contingency requirements. In these circumstances, a pending sale is listed as contingent.
Some common contingencies you’ll find in a pending sale:
- Kick-out clause: The seller reserves the right to cancel your contract if another buyer makes an offer without contingencies
- Inspection contingency: The buyer waits until a professional inspection of the property confirms there are no major structural issues they will inherit should they complete the sale.
- Sale contingency: The buyer is given time to sell their previous home before closing the sale and taking on a mortgage for their next property.
Can you make an offer on a pending home?
Not really, but you can always ask. The most common scenario is that the first buyer submitted an offer with a clause that specifies that their contract can’t be voided just because a higher offer comes in. In most cases, a seller would have to officially cancel the sale to accept another offer and sales are most often only canceled when contingencies aren’t met.
If a home is listed as ‘pending’ but taking backups, you can still make an offer.
Will a real estate agent show me a pending listing?
Real estate agents will keep backup buyers when they know that
- Either the sale might fall through
- The house is technically still fit for sale until closing.
This is why some agents still let you to tour a home even if you can’t make an offer due to a non-compete clause.
Quick note: It’s very rare for sellers to let you tour their home once it’s in the pending stage.
How long will a home be pending for?
‘Pending’ is considered a transitional phase that can typically last anywhere from a week to two months.
Why does a pending home sale fall through?
Here are some of them:
- Failed short sale
- Financing
- Change of heart
- Appraisal issues
- A troubled home inspection
Quick note: Thing you need to know:
- When a listing says the home is pending, it means the seller has accepted an offer
- Once a home is pending, the buyer and seller begin the process of closing on the home
- Pending is not the same as sold, so there are plenty of reasons the home may be re-listed
- Pending is not the same as “contingent” or “under contract.”
- While you can’t put an offer, you can always position yourself as the backup buyer.
All in all, you can always sign up with Flyhomes to buy your first home. Flyhomes takes you through the entire process, from start to finish. And they’ve got a great mortgage team to help you, should you require any financial assistance!
About the author: As the son of a construction contractor and a former property manager, Scott Dylan Westerlund knows how to keep the lights on and the water running. In addition to Flyhomes, he has written for Angi, HomeLight and HomeAdvisor. His hobbies include fixing things around the house, baking things up in the kitchen, and spending quality time with his wife and daughter just about everywhere.
