What Does Pending Mean in Real Estate?

Article Summary:

Pending and contingent statuses both indicate an offer has been accepted on a property. Contingent indicates the buyer or seller has unmet contingencies that must be fulfilled before the deal closes. Pending signals these contingencies have been met and the sale is progressing forward. However, that doesn’t mean the house is gone for good.

So, you’re looking for a new home, and your real estate agent recommends using a multiple listing service to start your search. While browsing, you come across several “pending” and “contingent” properties. One of these listings even looks like your dream home! Does a contingent or pending sale mean there’s no chance for you?

Once a property reaches pending status, your chances of placing a successful bid on the property drop. However, you still have a chance. Both terms mean an offer has been accepted on the home and the house is under contract. Ultimately, the house will likely sell but the deal isn’t closed yet. Can a pending sale fall through? And what about a contingent sale — is that similar to a pending sale? Read on to find out the differences between these terms and what they mean for you as a buyer.

What does pending mean in real estate?

If a home has a “pending” status, then the deal is almost closed. This status comes right before “sold” and indicates the buyer and seller are past the contingency stage (more on this later). However, the house is still on the market until it receives a “sold” status.

Before a home’s status becomes “sold,” the property passes four stages in the homebuying process:

  1. For sale
  2. Under contract
  3. Contingent
  4. Pending

This gives you a better idea of how difficult it is to buy a house at the pending stage. By this point, contracts are drafted and signed, funding is arranged, and contingencies are satisfied on both the buyer’s and seller’s ends.

What’s the difference between contingent and pending?

A contingent status means the seller has accepted an offer on the house. However, before the sale goes through, there are certain conditions, or contingencies, that must be met. The listing is still considered active until the contingencies have been met.

Once these contingencies are met, the house is listed as a pending home sale. This indicates the seller has accepted the offer and the sale is likely to go through.

Can you make an offer on a pending home?

You can make an offer on a pending sale, but it’s tricky. After all, the seller’s obligation is to the initial offer. If the sale status is pending, they’re almost ready to close. Most real estate agents will tell you to ignore pending sales entirely.

However, if you feel like this is truly your dream home, you can contact the seller’s agent and make an offer. There’s always the chance the financing falls through for the buyer, which could put you at the top of the potential buyers list. Let’s look at some reasons why a pending sale might fall through.

Why would a pending sale fall through?

Problems constantly pop up in real estate transactions, even at the tail-end of a sale. These may cause a solid deal to collapse:

  • Financing collapses. When a real estate transaction is pending, there’s a good chance the buyer is already pre-approved. However, sometimes the financing falls through because of a drastic income change. This may cause the lender to change their mind about granting the mortgage.
  • Failed home inspection. Even if not listed as a contingency, a revealing home inspection can sour the deal. Often the seller will be asked to rectify the problem before closing, but if they refuse, the buyer may pull out.
  • Low appraisal. During a bidding war, the property’s asking price may exceed the appraised value. Lenders don’t want to loan more money than the true market value of the house as it increases their risk on the mortgage.
  • Buyer’s remorse. It happens. Buying a house is a big deal and people can get cold feet. If the sale falls through, the buyer will likely forfeit the earnest money deposit.

Common pending statuses

Pending sales can take on different forms as well. Some versions of pending home sales could mean you have a better chance of getting the house — if you have your heart set on it — than others.

  • Pending taking backups. A seller may continue showing the house and accepting backup offers in case the original deal falls through.
  • Pending short sale. This means the property is going through the short sale process. This can be lengthy, so the seller isn’t accepting any backup offers.
  • Pending more than four months. Since sales don’t often take more than a couple of months, this status indicates something is holding up the sale. It might be worth investigating further if you’re really interested.

Despite these different statuses, it’s important to remember that a seller cannot accept a new offer until the original offer is removed.

What are some common contingencies in real estate?

Unfortunately, a lot can go wrong when you’re looking to buy a house. To mitigate any foreseeable problems, a buyer may put a contingency in place. These contingencies must be satisfied before the deal closes. These are common contingencies in real estate:

Buyer Contingencies

  • Home inspection contingency. A potential buyer may not agree to buy the house if the home inspection shows any serious problems. This often occurs if the potential buyers know they can’t afford any major repairs.
  • Mortgage contingency. A mortgage contingency means the buyer has a certain amount of time to get final approval on the mortgage before the sale can proceed. Even though a buyer has already been through the pre-approval process, things can go wrong at the last minute. This may lead a lender to deny a mortgage’s final approval.
  • Appraisal contingency. Appraisals are required before a real estate sale. The appraisal is usually close to the selling price, but that’s not always the case. If an appraisal is significantly lower than the selling price, a lender may not extend a mortgage that’s above the real market value of the house.
  • Title contingency. A title contingency will ensure there are no liens or other encumbrances against the house before agreeing to close. However, we always recommend buying title insurance to protect against any future claims on the property.
  • Home sale contingency. This status means the purchase of the new home is conditional upon the sale of the buyer’s previous home. This usually happens when the buyer can’t afford to buy the new house until their other one is sold.

While contingencies aren’t required, they’re often in place to protect the buyer. However, a seller is also free to reject any contingencies, especially if they intend to unload the property quickly.

Pro Tip

A seller can stipulate a sale with no contingencies. This often happens in a seller’s market where homes sell quickly. A buyer who doesn’t need any contingencies is more competitive.

Seller contingencies

One of the few contingencies a seller can enforce is the “kick-out” clause. This clause allows a seller to accept a contingency offer and continue showing the house.

  • With kick-out. If an offer comes in without any buyer contingencies, the seller can “kick out” the contingency offer. You’ll likely see this clause in a buyer’s market where a seller wants to speed up the sale process.
  • Without kick-out. This may indicate the seller isn’t in a hurry to seal the deal. This could be for all kinds of reasons, but it’s often because they need more time to move out of the house.

How can I avoid contingencies?

While contingencies are not required in the home-buying process, they do offer both seller and buyer certain protections. That being said, a buyer with a no-contingencies offer may quickly attract a seller’s attention.

Maybe there’s a house you’ve had your eye on for a months, but now a bidding war has started over the property. If you’re positive this is the house for you, regardless of what the home inspection or title search reveals, you can make the seller an enticing offer without any contingencies.

Hopeful about your dream house? To make the right offer, come prepared with a preapproval letter from your mortgage lender. Check out the profiles below to find a mortgage lender that fits your financial goals.

Can a seller accept another offer while contingent?

Sometimes. If the seller has a kick-out clause, they might accept an offer that doesn’t include contingencies.

If there’s no clause, the seller can only accept another bid if that buyer backs out of the deal, or doesn’t meet their contingency requirements. You can bid on a house that’s contingent, but your offer won’t be considered until the first accepted offer falls through.

Are contingent offers bad?

They’re not ideal for the seller, but a lot depends on how quickly they want to sell. In that case, a seller may prefer to accept an offer that doesn’t have any contingencies.

However, keep in mind that making a contingent offer can make you less competitive in the market.

How long is a contingent offer good for?

A contingent offer is good for about 30 to 60 days. Parties involved in the original sale will, ideally, satisfy the contingencies as soon as possible to schedule the closing date.

If there is a kick-out clause, there’s a strict deadline for the contingencies to be met. If the buyer doesn’t meet that deadline, then the seller can cancel the contingent offer and put the house back on the market.

How long can a house be pending?

There’s no one answer for this question, as most of the answer relies on what the contract terms are. If the buyer comes pre-approved and ready with financing in hand, then the pending status typically ends after a month or two. However, the seller may need more time to pack up their things, or the borrower may need additional time to get financing. This will extend the time a house remains in pending status.

Below you can see the average number of days a house spent on the market before displaying a “sold” status. This may give you a better idea of how long it takes to sell a house.

Can a realtor show a pending house?

A real estate agent will sometimes continue showing a house with a sale pending. This usually means the seller thinks something might go wrong or wants to accept backup offers just in case.

Remember, they must still honor the original contract, but your offer could be considered if the sale doesn’t happen.

Can you outbid a pending offer?

The short answer is no. Once a home’s status is pending, the seller can’t accept a higher offer. Even if the seller chooses to accept the offer as a backup, your offer can’t be considered until the original deal falls through.

How long do homes keep a pending status?

Since a pending status means nearly all parts of the deal have been finalized, it doesn’t stay pending for long. Pending home sales will remain at that status until closing, which should occur within a month or two. After closing, the home status will be listed as “sold,” and then it’s officially off the market.

What is the difference between pending and under contract in real estate?

In real estate, a house under contract only means that an offer has been made and accepted by both parties. This is just the beginning of the buying process, and financing and contingency issues still need to be addressed.

When the status moves to pending, those matters are complete.

Why do houses go from pending to back on market?

Pending usually means the house is no longer active and is going to sell to the accepted bidder. But the real estate industry is tricky, and things don’t always go as planned.

If any of the above scenarios occur—the financing falls through or home inspections show serious problems—the deal may not take place. In that case, the pending sale will return to an active listing and the house will begin showing again.

What does it mean when a house has been pending for a long time?

It could mean the real estate agency forgot to change the status from “pending” to “sold.” However, this could also mean there were some issues between the seller and buyer, causing the closing process to be delayed.

Key Takeaways

  • A pending sale is almost complete, while a contingent sale is farther from closing.
  • Contingencies are conditions that must be met before finalizing a home sale.
  • Pending sales mean all contingencies, if any, have been met and the home sale can be finalized.
  • A home pending sale is not set in stone — it can still fall through.

The right financing for the right home

Have you found your dream house? Maybe you’ve already spoken with the seller and are ready to talk financing. We’ve got you covered!

At SuperMoney, we make sure you have all the information you need for every financial decision. Check out these reviews to find home loans that suit your needs.

Article Sources
  1. New Residential Sales — U.S. Census Bureau
  2. Home & Repair — Colorado Department of Regulatory Agencies
  3. What is a Participation Mortgage? — SuperMoney
  4. How to Invest in Real Estate: An Expert Guide for Beginners — SuperMoney
  5. SuperMoney Guide to Property Value: 4 Critical Factors that Determine the Value of Property — SuperMoney
  6. Home Purchase Mortgages: Reviews & Comparisons — SuperMoney
  7. Best Mortgage Lenders | February 2022 — SuperMoney

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