You’ve spent months looking for the perfect home and you think you’ve finally found it. But when you go online to do some additional research, the home’s status is listed as “pending sale.” Absolutely unlucky? It doesn’t say “sold,” after all. Find out what ‘on hold’ means for a home for sale and what your options are if you’re interested.
What does pending sale mean in real estate?
A pending sale in real estate simply means that the seller has received and accepted an offer on their home. However, the deal is not yet finalized – so “pending” and not just “sold”. If you are interested in a pending property, your agent should consult with the seller’s agent to find out more about the status. You might still have a chance, though it’s probably slim.
Can you make an offer on a pending house?
In short, yes. But it might not be worth it. A pending deal isn’t set in stone, but it’s not really open for discussion either. Unless the current deal fails, you can’t just convince the seller by offering more money or waiving certain contingencies. In fact, most sellers are contractually bound to honor the current offer, even if a higher offer is presented.
However, if you are really interested in the house and are counting on the failure of the current offer, you have the option of submitting a replacement offer. Be sure to consult your real estate agent for advice on how best to move forward in this situation.
Reasons why a pending sale may return to the market
It is possible, if not likely, that a pending sell will re-enter the market. This can happen for many reasons: Below are some common reasons why real estate purchase transactions sometimes fail.
It is not uncommon for a buyer’s financing to fail before the loan closes. Many buyers will be pre-approved for a mortgage when they make an offer on a home. However, the loan is not official until it is submitted for underwriting and the buyer’s assets, income and other applicable information are verified. If problems arise during this process, the loan could be refused. Financing issues that prevent the buyer from obtaining financing could also arise if there have been significant changes in a buyer’s credit rating, assets or income.
Many sales contracts include a mortgage contingency, specifying the date by which financing must be guaranteed by the buyer. Failure to obtain financing by this date would constitute a breach of contract. In these circumstances, the seller could choose to put the house back on the market.
Unfavorable home inspection
A buyer may choose to back out of a real estate transaction if significant issues are discovered during the home inspection. This is especially true if an inspection contingency has been included in the offer. For this to result in the home being relisted, a licensed professional inspector would have to indicate that it needs major repairs or upgrades, and the buyer would have to decline the seller’s offer to remedy the issues (if applicable).
This arrangement allows homeowners in financial difficulty to sell their home for less than the amount they owe their lender, in order to avoid foreclosure. But here’s the catch: a short sale can only take place with the permission of the lender. If the bank does not accept the offer price, the transaction will fail and the house will come back on the market.
Cancellation by the buyer
Life happens, and deals sometimes fail. A buyer may be forced to move for work, for example, or may simply decide that the home is no longer the best fit. Although they may lose their earnest money deposit by walking away, it is not impossible for a buyer to simply walk away. In the rare event that this happens, the sale will no longer be on hold and the home will likely come back on the market.
What is the difference between pending and contingent?
A pending sale and a conditional sale are similar, but not the same thing. Both indicate that the seller has accepted an offer. But when a property is in conditional status, the seller chooses to keep the listing active, as there are contingencies the potential buyer has not yet encountered. When a home is on hold, it indicates that the buyer has met all eventualities and the sale should close shortly, assuming no other issues arise.
At the end of the line
If the house of your dreams is waiting for sale, it does not necessarily mean that you have no chance of making it yours. The odds aren’t good, but still, a number of things could go wrong and send the house back on the market. Consult your real estate agent if you have a pending home at heart – they can work with you to submit a replacement offer or step in if the pending deal fails.