Have you ever come across the term “pending” when browsing real estate listings? This terminology might be confusing if you’re new to buying or selling a property. However, understanding what “pending” means is crucial for anyone involved in a real estate transaction.
In simple terms, pending indicates that a property is under contract and the sale is in progress. It’s an important status that signifies that a buyer has made an offer on a property, and the seller has accepted it. But what exactly does this mean for both parties involved? In this article, we’ll delve deeper into the meaning of pending in real estate and explore its implications.
What Does Pending Mean?
Pending, also called “under contract,” is a status used in real estate to indicate that a property sale is in the works. It’s usually displayed on online listings and other marketing materials when a buyer has made an offer on a property and the seller has accepted it. This means both parties have signed a purchase agreement or contract, and the sale is pending finalization.
The time between a buyer’s offer being accepted and the final closing of the sale is what is referred to as “pending.” During this period, both parties are working towards fulfilling any contingencies or conditions in the purchase agreement. The sale will close once all conditions have been met and all necessary paperwork has been completed.
What Are Contingencies in a Pending Sale?
As mentioned earlier, during the pending period, both parties are working towards fulfilling contingencies or conditions stated in the purchase agreement. These requirements must be met for the sale to move forward. Some common contingencies include:
- Home inspections – The buyer usually has a window of time to inspect the property and negotiate repairs or credits with the seller.
- Financing – The buyer must secure financing for the purchase of the property. If they are unable to do so, the sale may fall through.
- Appraisal – The lender will require an appraisal to ensure the property’s value matches the agreed-upon price.
- Title search – A title search is conducted to ensure no liens or legal issues with the property.
- Home sale contingency – If the buyer needs to sell their current home before purchasing the new property, this contingency allows them time to do so.
Both parties need to fulfill these contingencies within the specified timeframe to move forward with the sale. If any of these conditions are not met, it could result in a terminated contract and the property being returned to the market.
What Are the Implications of a Pending Sale?
For Buyers:
- Secure your dream home – When a property is pending, someone else has made an offer on it. As a buyer, this gives you peace of mind, knowing that no one else can swoop in and make an offer while you’re finalizing the sale.
- Time to fulfill contingencies – The pending period allows buyers time to conduct inspections and secure financing without feeling rushed. It also allows them to back out of the sale if any issues arise during this time.
- Quick closing – Since most contingencies have been fulfilled, a pending sale usually results in a quicker closing, meaning you can move into your new home sooner.
For Sellers:
- Commitment from the buyer – When a property is listed as pending, the seller has accepted an offer from a serious buyer. This indicates that the buyer is committed to purchasing the property and is willing to go through with the sale.
- Less time on the market – A pending sale shortens the time a property spends on the market, assuring sellers that they will soon be able to move on from their property.
- Higher chance of closing – With both parties working towards fulfilling contingencies, there is a higher chance that the sale will go through and result in a successful closing.
How Long Does a Sale Remain Pending?
The length of time a sale remains pending varies depending on the terms of the purchase agreement and how long it takes to fulfill contingencies. On average, a pending sale can last anywhere from 30 days to several months.
If all contingencies are met within the specified time frame, the sale will move forward to closing. However, if any issues arise or conditions cannot be fulfilled. The contract may be terminated, and the property will return to the market.
FAQs
Q: What happens if a sale falls through during the pending period?
A: If a sale falls through before contingencies are met, the contract may be terminated, and the property will go back on the market. However, if all conditions have been fulfilled and the sale fails to close for reasons outside of either party’s control, the contract may include a clause for both parties to revert to their original positions and move on from the sale.
Q: Can I make an offer on a property that is already pending?
A: Technically, yes, you can still make an offer on a pending property. However, it’s highly unlikely that your offer will be accepted as the seller has already committed to another buyer.
Q: Can a sale be pending for an extended period?
A: Yes, a sale can remain pending for an extended period if the contingencies outlined in the purchase agreement take longer than expected to fulfill. However, both parties can renegotiate or terminate the contract if they feel the sale takes too long.
Q: Can a pending sale fall through after all contingencies have been fulfilled?
A: Yes, even if all contingencies have been met. There is still a chance for a pending sale to fall through. This could happen if the buyer’s financing falls through or encounters any other unforeseen issues.
Q: Can a seller accept backup offers while the sale is pending?
A: A seller can accept backup offers while a sale is pending. If the current contract falls through, the seller has another offer waiting in the wings to move forward with.
In summary
A property listed as “pending” means that an offer has been accepted by both parties. And the conditions outlined in the purchase agreement are being fulfilled. It’s an exciting time for buyers and sellers as they work towards finalizing the sale. However, it’s crucial to carefully navigate the pending period to ensure a smooth and successful closing.
So, if you’re buying or selling a home and see it as pending. Remember that this means you’re one step closer to achieving your real estate goals. So, keep an eye on the status and fulfill all contingencies within the specified timeframe to ensure a successful closing. Happy buying or selling! Is there anything else you would like to know about the pending process? Let us know in the comments below!
