So you’ve looked through different listings and finally found it. Right there on the screen of your laptop is the perfect
condo, single family home, apartment, or multifamily home. It fits your budget, has all the amenities you wanted, and is in the right location. However, there is one small problem: It is sale pending.
So, what does pending mean in real estate? Do you still have a chance or you are too late?
These are some of the questions that would be going through the mind of a real estate investor in this situation. Let us first define pending in real estate.
What does pending mean in real estate? A sale pending (or active under contract) status simply means that the home seller has accepted an offer from a potential buyer, but the deal is yet to close. Once the contract has been signed and all the contingencies waived or addressed, the property is placed in pending status. Pending deals are not considered active listings. An income property will retain a pending status until all the legal requirements have been fulfilled. A pending sale could take anywhere from a few days to several weeks.
There are different types of pending sales in real estate. Here are some of the most common:
- Pending Short Sale – The accepted offer is a short sale and requires approval by additional banks or lenders beyond the seller’s or buyer’s control. This could take a long time to process.
- Pending – Taking Backups – This is where the seller has accepted an offer, but the deal has hit a snag in the final stages. The seller is now taking backup offers just in case the deal fails.
- Pending – More Than 4 Months – An offer has been accepted and remained pending for over four months. This could be due to delayed construction, snagged negotiations, an realtor oversight, or longer-than-usual processing time.
Many people confuse the term pending vs contingent. Let us look at the difference between pending and contingent.
What does contingent mean? Contingent means that an offer has been accepted from a hopeful buyer, but there are some conditions that are yet to be fulfilled. During the contingent period, the buyer can pull out of the deal without losing his/her earnest money deposit. Here are some of the most common contingencies when purchasing a home:
- Financial contingency – If the buyer fails to get the mortgage or home loan he/she applied for, he/she can opt out of the deal.
- Inspection contingency – If the home inspection uncovers major problems, the buyer can ask for compensation or repairs or opt out altogether.
- Appraisal contingency – If an appraisal shows that the property is worth less, the buyer can ask for a lower price or opt out.
- Title contingency – If the title report shows a confusing ownership status, the buyer is free to opt out,
So, what is the actual difference between a contingent vs pending status? We could simply say that contingent deals turn into pending deals once the contingencies are met.
Can you make an offer on a pending home?
It is important to note the difference between a pending sale and a sold home. While pending means that the seller has accepted an offer, no money has exchanged hands, and the property is yet to be transferred to the seller. If the seller is accepting backups, there is no reason why you should not be able to submit an offer.
It is also important to remember that contracts fall through at the last minute for different reasons. For example, the buyer could lose or quit his/her job, thus losing access to financing. Or the buyer might just develop cold feet and withdraw from the deal at the last minute.
If you come across a sale pending property that you are interested in, here is what you can do to increase your odds of winning:
Get your finances in order
Before making an offer on a pending sale, save up for the down payment and get pre-approved for a loan. In this way, you can make a strong offer and back it up when it is time to close.
Express your interest
Ask your realtor to talk to the seller’s agent about your interest in the home. Hoping to get a better offer, most sellers’ agents will continue showing the home to hopeful buyers until the last minute.
Negotiate with the seller
To grab the attention of the seller, you need to make your offer stand out from the rest. Though it is risky, consider making an offer without contingencies. In addition, you could offer flexible moving dates and pay closing costs. Presenting convenient terms to the seller will enhance the chances of your offer being accepted.
Write a personal letter
If you are sure that this is the rental property that you want, make an emotional appeal to the seller. Send a letter (preferably handwritten) explaining why you want to buy that specific property. This compelling letter could be what makes you stand out from other bidders.
Always be on the lookout for communication from the seller and your buyer’s agent. This means checking your email regularly and being responsive to texts and phone calls. Being readily available will show that you are really interested in the home, and will leave a good impression with the seller.
If you’ve always wondered ‘What does pending mean in real estate?’, you have your answer. The next time you come across a ‘pending sale’ status next to your dream investment property, don’t get discouraged. If you play your cards right, the home could end up being yours. If you are looking for great cash flow properties for sale, try the Mashvisor Property Marketplace. You will find all kinds of off market properties spread across the US housing market. With filters like city, cap rate, cash on cash return, budget, property type, and listing type, you can narrow down your search to find properties that fit your criteria.
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