What Does “Pending” Mean in Real Estate?

Is your dream home truly off the market when it’s listed as pending? While a pending status can be an uncertain time if you’ve made an offer, it’s good news if you’re a prospective buyer. A home is not off the market until the sale is closed and all contingencies are met. Until that day, anything can happen. 

What Pending Means

When a buyer makes an offer on a home and that offer is accepted, the home is considered under contract. From there, a buyer does inspections and can back out based on the results or the subsequent repair negotiations.

Pending is the stage of the selling process when the buyer has released all of their contingencies and the property is pending final closing. The true definition of pending means all parties have satisfied their ends of the contract and the home is simply awaiting closing day. However, there are some gray areas as on some sales, the contingencies remain until close day. These properties may be considered pending, but notes will also show that they are “contingent on buyer sale” or have a stipulation that they can be “shown for back up.”

Your option as a buyer can be to watch the home to see if the transaction fails and the home goes back on the market, then make an offer, OR you can write a “back up” offer while the home is under contract. Even after agreed to and signed by the seller, back-up offers only come into play if the original transaction falls through. In other words, a seller can’t entertain a back-up offer simply because it’s higher or better than the original offer while a home is under contract. If the current contract does not cancel and the transaction closes, the buyer who submitted the backup offer is out of luck.

For sellers, backup contracts are great insurance in case the current buyer cancels the contract. It also provides great leverage when negotiating with the current buyer on repairs. It’s much easier to take a hard line on repairs when you know you have another buyer waiting in the wings.

If you’re confused or unsure about status of a home, ASK US! We have access to accurate MLS information, as well as information on possible buyer contingencies, while sites such as Zillow or Redfin don’t list the details of contingent offers on their sites.