What does pending mean in real estate? When a house is listed as pending, is it still on the market?
Can you still make an offer? If you’re asking these questions, you’re in the right place. Read on to learn more.
What Does Pending Mean in Real Estate?
Different real estate status terms are important to understand whether you’re buying or selling a home.
The listing status (active, closed, pending or contingent, etc.) can tell you whether a seller is still accepting offers.
It also lets you know how far along the buyer and seller may be in the closing process. Until a property is listed as sold, other status terms like pending or active contingent indicate that there could still be a chance to submit an offer.
It’s helpful to understand all the status terms to get a clearer picture of what pending means in real estate. Let’s look at the most common real estate listing status terms you might encounter and what they mean.
Active listings are what buyers hope to see. These listings are up for sale, and buyers are free to schedule a showing of the home and make an offer. The seller of an active listing may have received an offer (or multiple offers).
The important distinction for an active listing is that no offer has been accepted by the seller yet. When a home is listed as active:
- You are free to schedule a showing.
- You can submit an offer.
- The seller may have received offers, but has not accepted any yet.
Active Contingent Listings
Active contingent listings are a bit more complicated than active listings. When a listing is labeled active contingent, the seller has accepted an offer, but there are still a few contingencies that need to be met before the sale can move forward.
At this point, the transaction becomes legally binding. Contingencies differ on a case-by-case basis, but there are a few common contingencies included in real estate contracts.
In some cases, the buyer may have a contingency that they will only move ahead with the purchase if they can get approved for financing or successfully sell their own home.
The seller may have to meet contingencies like a successful inspection and appraisal of the home. There is usually a deadline for contingencies to be met that is stated in the contract, and if they are not, the listing will revert to its original active status.
For a listing to be considered active contingent and not just active, this means:
- A buyer has made an offer on the home.
- The seller has accepted their offer.
- The buyer or seller must now meet a few contingencies (requirements) before the listing changes to pending.
- If contingencies aren’t met in time, the listing status will become active again.
Once any contingencies or requirements in a contract have been met, the listing status will change to pending. You may also hear this referred to as deal pending or under contract.
What Does Pending Mean in Real Estate?
Pending means the seller has received an offer on the home, accepted it, checked off any contingencies, entered the escrow period, and started the closing process.
During the pending stage, a seller may be tying up loose ends, scheduling inspections and appraisals, making agreed-upon repairs, and securing the new home.
Pending vs Active
A buyer will be finalizing their financing and moving through the sale of their own current home during the pending stage. Pending listings are no longer active, on-market listings.
It’s not impossible to make an offer on a pending listing, but it’s important to understand that it is very uncommon for a pending listing to go back on the market.
Average Pending Listings
Only about 1.4% to 4.3% of homes in the pending status end up going “back on market” (abbreviated as BOM in the MLS), according to HomeGo. Most of the hurdles have already been met.
So it takes a major hiccup in the transaction for a pending listing to revert to active again. The major exception is when a listing is labeled as “pending, showing for backup.”
Taking Backup Offers
In this case, the seller is actively taking new offers to have a backup should the original offer be taken off the table. If you’re set on making an offer on a home that is listed as pending, there are a few things to keep in mind.
These will give you the best chance of getting the seller to entertain your offer. We’ll cover the steps to making an offer on a pending listing in detail below. To recap, when a home is listed as pending, it means a few things:
- A buyer has made an offer on the home.
- The seller has accepted it.
- Any contingencies have been met.
- The listing is under contract.
- The closing process has begun.
Closed listings are properties that have been officially sold and are now off the market. The closed label applies to listings where the title and deed have been transferred to the new owner.
And the home (or property) is officially in the new owner’s possession. The only way a closed listing will be back on the market is if the new owners decide to list it for sale.
Why Pending Sales Fall Through
When a listing is pending, there is still a small chance that the sale could fail to move forward and revert to “back on market.” Let’s look at the most common reason pending sales fall through.
There are many reasons a buyer may have second thoughts about purchasing a home. Perhaps they’ve decided the property isn’t a good fit, found a better location, or made multiple offers at once and decided to move forward with another.
In any case, the buyer is ultimately in charge of the real estate transaction, and if they choose not to move forward, the listing will no longer be pending.
Most buyers will enter a real estate transaction with a mortgage pre-approval letter in hand. This indicates to the seller and listing agent that the buyer will be able to finance the purchase of the home without issue.
But in the time it takes to close on a house, things can change. If the buyer loses a job or suddenly takes on additional debt, the original pre-approval letter won’t matter.
The lender’s assessment of their current financial situation will. If the changes have been significant, the buyer may not be approved for a mortgage, and the pending listing could go back on the market.
Inspection and Appraisal Problems
A professional home inspection could reveal problems the buyer didn’t know about. In many cases, the issues will be minor, but if it’s a problem that will be expensive to fix (foundation issues, mold, asbestos, etc.), they may back out of the sale.
Likewise, if an appraiser determines that the home is worth less than the buyer offered, they will be able to back out of the sale. And you don’t want this to happen at the last hour.
Even if the buyer is still willing to move forward, the lender they are using to obtain a mortgage could refuse to lend the full purchase amount because it isn’t consistent with the appraiser’s assessment.
How to Make an Offer on a Pending Listing
Whether you’ve discovered a listing that is pending, showing for backup, or just labeled as deal pending, it’s usually still possible to make an offer. The process isn’t the same as making an offer on an active listing.
But it’s the only way to make sure you’re at the top of the list for consideration should the current sale fall through. It’s wise to go ahead and submit your offer while the listing is still pending.
If the sale does fall through, the listing will be labeled “back on market” and opened up to any new offer that is submitted. Let’s walk through the process of making an offer on a pending listing and what you can expect when you do.
Talk to Your Agent
If you’re set on making an offer on a pending listing, the first order of business is discussing it with your agent. Your agent can contact the listing agent (the seller’s agent) to schedule a showing.
This paves the way for you to submit an offer. Your agent can also find out the timeline on the current offer, so you’ll know right away if the deadline passes.
Make an Irresistible Offer to the Seller
You may not know the details of the currently accepted offer. Still, it’s hard for a seller to refuse an offer that exceeds the asking price, includes better terms, or waives certain bonuses a seller may have included in the sale (like paying your closing costs).
If you can contact the seller in person, via phone, or through a handwritten letter and make your case, you’ll have a better chance of convincing them to entertain your offer instead.
Be Persistent and Follow Up
The seller may not initially accept your offer, but if things aren’t progressing as they’d like with the current buyer, your offer will appear even more attractive. Make yourself available to your agent or the seller.
And the listing agent by providing them with contact information where you can be reached anytime. Check in regularly with your agent for any updates. A persistent approach can let the seller know that you’re serious about buying the home.
So, What Does Pending Mean in Real Estate?
What does pending mean in real estate? It indicates that a listing is in escrow and on the path to closing, but it doesn’t mean it’s officially sold. The seller of a pending listing has received one or more offers.
They’ve accepted one, and both parties (the buyer and seller) have met any required contingencies for the sale to move forward. Although a pending listing is very likely to close, that is not always the case.
Buyer’s remorse or unforeseen problems with financing, the appraisal, or financing can cause a pending sale to fall through. If you’re a buyer and have an interest in a pending listing, it’s a good idea to make an offer while the listing is still pending.
This way, if any of the above issues surface, you will be at the top of the list to buy the home and avoid it going back on the market. We’ve reviewed different real estate status terms like active, active contingent, pending, and closed.
A pending listing doesn’t mean the property is officially sold yet, so if you come across a pending home you like, don’t hesitate to throw your hat into the ring.
If you’re a seller and your property is pending, it’s wise to continue to accept offers from interested buyers or allow showings for backup offers.