What Does Pending Mean in Real Estate?

Understanding the nuances of real estate terminology is crucial for buyers and sellers navigating the market. Among the terms frequently encountered are "pending" and "contingent."

While they might appear similar at a glance, they signify different stages and conditions in the sale process of a property.

I can't tell you the number of times clients have asked me what pending means. Let's put it this way - it's a lot!

Whether buying or selling a home, it is essential to understand the various listing statuses. They can impact decision-making in a transaction.

Maximum Real Estate Exposure explains that both statuses indicate that a property is under contract.

We will examine what "pending" means in real estate. You'll know how to distinguish it from "contingent" status. With this knowledge, you'll better understand the implications of each for buyers and sellers.

Our comprehensive guide is structured into four main sections. You will get an introduction to the terms, an in-depth look at pending status, a comparison with contingent status, and practical advice for navigating these stages.

Introduction to Real Estate Statuses

When a property is listed for sale, it goes through various statuses from when it's listed until the sale is closed. Understanding these statuses helps buyers and sellers make informed decisions.

Two often confused statuses are "pending" and "contingent."

• Pending: Indicates that the seller has accepted an offer on a property. The sale is being completed, but it has yet to close. This status means that all contingencies have been met or waived, and the deal is moving forward to closing.
• Contingent: Suggests that the seller has accepted an offer. However, the final sale is subject to certain conditions or contingencies being met. These might include inspections, financing, and selling the buyer's home.

From years of experience, most homes remain contingent in MLS for 2-6 weeks. The fewer contingencies, the quicker the status will change to pending.

Please look at the complete overview of the meaning of contingent here.

Understanding Pending Status

When a property's status changes to pending, the sale process has entered a more definitive phase. There are some critical characteristics of pending status.

You will learn what it entails for the sale process, how it affects the ability of other buyers to make offers, and what steps remain before the sale is finalized.

• Key Characteristics: Once a property is pending, all contingencies outlined in the contract have been addressed. This doesn't necessarily mean the property is guaranteed to sell, but it strongly indicates that the sale will likely proceed.
• Implications for Buyers: A pending status generally means the seller no longer accepts new offers. However, in some rare cases, it's not entirely out of the question. If the deal falls through, interested buyers should stay in touch with the listing agent. Communication should be made through your buyer's agent.
• Final Steps: The final steps in a pending sale include completing the appraisal, securing financing, and closing the sale. These steps are typically procedural but crucial for the transaction to complete. The appraiser determining the value can be a stumbling block, especially in bidding wars.

Pending vs. Contingent Status

Understanding the difference between pending and contingent statuses is crucial for navigating real estate transactions.

We will compare and contrast the two so you can understand the implications whether buying or selling.

• Contingent Status: Contingent sales are still in a somewhat conditional phase. There are specific hurdles that must be cleared for the sale to proceed. These contingencies are protections for the buyer and must be met for the sale to move forward.
• Comparison with Pending: The main difference lies in the contingencies. In a pending sale, these have been satisfied, moving the sale closer to completion. This distinction is crucial for understanding how secure a sale is and what actions might still be required.

Navigating Pending and Contingent Sales

Understanding how to navigate these stages can make a difference in securing a sale or purchase for both buyers and sellers.

Let's examine practical advice for dealing with pending and contingent statuses. From nearly forty years as a Realtor, these tips will help potential buyers and sellers.

The advice is crucial for buyers interested in properties under these statuses. The suggestions for sellers on managing offers during these phases are also valuable.

• For Buyers: It's essential to understand that a contingent property might still be attainable. On the other hand, a pending sale is less likely to be disrupted. Buyers should communicate closely with their real estate agents to understand the feasibility of pursuing a property in either status.
• For Sellers: Sellers should work closely with their agents to navigate the complexities of contingent offers. Doing so ensures they are prepared for any scenario preventing the sale from moving to a pending status.

Can You Make an Offer on a Pending Home?

No law says you can't make an offer on a pending property. You must know that a seller can only accept an offer if the first transaction fails.

Most of the time, when homes are pending, the house is no longer shown to prospective buyers. However, it never hurts to ask. You could submit a backup offer in hopes the sale gets terminated.

If the seller is open to accepting a backup offer, you can use it to secure a secondary position as a potential buyer.

Should the initial agreement not come to fruition, the seller can enter into a contract with you, making the house available for purchase.

While backup offers can be advantageous in competitive bidding situations and for pending sales, they do not guarantee the opportunity to purchase the home if the primary deal is completed.

Do Pending Homes Ever Fall Through?

Yes, they do, but it is rare. A few circumstances where a sale could fall apart near the conclusion is the buyer losing their job or making a significant purchase.

Over the years, I have heard about Realtor friends whose clients purchased a car right before closing. Doing so made their debt-to-income ratio fail the lender's standards.

Not paying bills on time could also cause a change in a buyer's credit status. Lenders have minimum credit scores to buy a home. It reinforces the fact that buyers need to be financially vigilant. Mistakes like this can be crushing.

Conclusion

In conclusion, the terms "pending" and "contingent" are crucial to understanding the progression of a real estate sale. While both indicate that an offer has been made and accepted, they differ significantly regarding the conditions remaining for the sale to be finalized.

A clear understanding of these terms and their implications can facilitate smoother transactions for buyers and sellers alike.

By understanding these terms, you can utilize more strategic decision-making in the real estate market.

Please get in touch with me if you are in the Metrowest, Massachusetts, area and require real estate help.