In most cases, when a sale is "pending," it means that all conditions have been satisfied and the buyer is making progress toward the closing date.
Do you remember the large, bright red "Pending" sticker that used to be affixed to the top of the "For Sale" yard signs? Before the advent of the Internet and online listings, the sign was the sole signal to a buyer that the property was offering a discount.
Customers of today may come across the words "contingent" or "pending" while shopping online, but they aren't necessarily sure what these terms signify.
Many purchasers believe that the phrase "sale pending" indicates that the property is no longer up for sale. On the other hand, this is not always the case.
Do not automatically write off a house simply because its status suggests that a sale is in the process of being negotiated. The following information will help you determine whether or not it is worthwhile to continue pursuing a "sale pending" house.
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It is helpful to have some familiarity with the regular process of real estate transactions in order to grasp the meaning of the phrase "sale pending."
In most cases, a buyer will make an offer "subject to" the results of a property inspection, an appraisal from the bank, or complete financing approval. They will sometimes "make it reliant upon" the sale of the home they are now living in.
The buyer has the option to back out of the contract as long as one of the following conditions is met: they are unable to obtain financing, they are unable to sell their present house, or they are unable to address an issue with the seller that arose after the inspection.
Real estate agents in some areas will identify a property that is subject to certain conditions as "active with conditions" or "active continue to show." This notifies potential buyers and agents that the seller will still consider alternative offers for the property.
During this time, the seller is unable to reach a contract with another buyer, but the transaction is not yet considered to be a "done deal."
This indicates that there is the potential for a "backup offer," which suggests that there is an option for another bidder to make an offer. The seller has the option of proceeding directly to the backup offer in the event that the primary offer is not accepted. In the event that this does not occur, they will be required to return to the market and, in a sense, begin from square one.
Although it is the exception rather than the norm, purchasers in certain marketplaces do not sign a contract until after they have completed their inspections and investigations. That indicates that the agreement they have with the seller is just "verbal." The transaction will not be finalized until all parties have signed the contract, and the house will remain up for grabs during this time period. During the days and weeks that the initial bidder spends inspecting, appraising, and investigating the property, a backup offer will attempt to outbid the offer that is now in the first position.
When all of the buyers' conditions are met, a transaction might be considered to be in the final stages of negotiation. The prospective buyer is "committed" to purchasing the property. The third stage is to begin the process of closure, which can take anything from a few days to a few weeks, depending on the circumstances.
The majority of real estate agencies won't identify a property as "pending" until this point, which indicates that the sale is very close to being finalized. In this particular scenario, the sale won't go through until the closing paperwork is signed.
After waiving all of their conditions, may a buyer back out of the deal? Certainly, despite the fact that the likelihood is lower. There are times when a buyer is faced with an unexpected circumstance and needs to back out of the deal. However, there is a high probability that the buyer will forfeit the good faith deposit.
Have the buyer's requirements been met by the inspections? How did they turn out? Were there any problems to report? To have a better understanding of the current offer, have your agent inquire about it with the listing agent using the following questions.
If you do so, you will have a better understanding of whether or not this presents a prospective opportunity. Additionally, it will provide the seller with some degree of power.
When it says "sale pending" on the home of your dreams, you shouldn't set your expectations up too high. Instead, you should focus on the sale of the home and put the house on the back burner. When market conditions shift, potential purchasers lose interest or banks tighten their lending rules, both of which cause agreements to fall through.
A shrewd real estate agent will make his or her client's interest in the property public so that in the event that a sale falls through, the prospective purchaser will be standing by, ready to make a move.