In the fast-paced world of real estate, it’s crucial for agents and industry professionals to understand the language and terminology associated with home sales. One term that we frequently come across is “pending.” But what exactly does it mean when a property is listed as pending? Read on to learn more about the meaning of pending in real estate, its implications for both buyers and sellers, and how real estate agents can navigate pending transactions effectively.
Understanding the Meaning of Pending in Real Estate
When a home sale is marked as pending, it signifies that the seller has accepted an offer from a buyer. It also means the property is no longer actively on the market. The seller has committed to moving forward with the transaction. However, it’s important to note that pending statuses can vary depending on the local real estate practices and MLS guidelines. It’s also important to remember that a sale marked as “pending” is just that. There is still a way to go before the sale is complete.
The Process Behind Pending Home Sales
A pending home sale typically goes through several stages before reaching a successful closing:
Inspection Contingency – During this period, the buyer has the opportunity to thoroughly inspect the property and identify any potential issues. If the buyer is satisfied with the inspection results, the sale proceeds as planned. However, if significant concerns arise, the buyer may request repairs, negotiate a lower price, or even cancel the sale.
Financing and Appraisal – The buyer secures financing or a mortgage loan. The lender then conducts an appraisal to assess the property’s value. If the appraisal meets or exceeds the sale price, financing proceeds. If the appraisal falls short, negotiations may be required to adjust the price or find alternative financing.
Title Search and Insurance – A title search is conducted to ensure the property has a clear title. Title insurance is also obtained to protect against any potential ownership or title-related issues.
Fulfilling Contingencies – At this point, the buyer fulfills any additional contingencies specified in the purchase agreement, such as the sale of their existing home.
Finalizing Documents – Both parties work together to complete and sign all necessary legal documents. This includes the purchase agreement, disclosures, and closing paperwork.
Closing and Settlement – The buyer brings necessary funds to cover the purchase price, closing costs, and any additional fees. The seller then transfers the property’s ownership to the buyer. The transaction is recorded, and the keys are handed over to the buyer. This marks the successful closing of the pending home sale.
It’s important to remember that this specific process and timeline may vary based on local regulations and individual circumstances. It’s crucial for real estate agents to guide their clients through each stage, ensuring a smooth transition from pending to closing.
Pending and Contingent: What’s the Difference?
Sometimes, you may encounter listings that are labeled as “pending and contingent.” This means that an offer has been accepted. However, certain conditions or contingencies must be met before the sale is finalized. Common contingencies include financing, appraisal, or the sale of the buyer’s existing home. Until these conditions are fulfilled, the status remains pending and contingent.
The Implications of Pending Sales for Buyers and Sellers
For sellers, a property listed as pending means they have a buyer lined up and they should refrain from considering other offers. However, it’s worth noting that some sellers may choose to continue showing the property while it’s pending, allowing backup offers in case the initial deal falls through.
Buyers, on the other hand, should be aware that a pending status indicates that the property is likely off the market. In some cases, though, it may still be possible to make an offer on a home marked as pending. If the initial deal fails to materialize, the seller may consider alternate offers to move forward.
Real estate agents should exercise caution when dealing with pending home sales. It’s crucial to communicate clearly with both buyers and sellers alike, ensuring they understand the status and any associated contingencies.
Earnest Money Deposit and Short Sale Considerations
During a pending home sale, the buyer typically submits an earnest money deposit as a sign of their commitment to the transaction. This deposit is held in escrow until closing. It provides some assurance to the seller that the buyer is serious about purchasing the property.
In the case of a short sale, where the property is sold for less than the outstanding mortgage balance, the pending status may last longer due to additional negotiations with the lender. Real estate agents dealing with short sales should be prepared for a potentially longer process and keep their clients informed accordingly.
The Role of the Real Estate Agent in Pending Transactions
As an agent, it’s crucial to understand the meaning of pending in real estate and the nuances of pending home sales. That way you can effectively guide your clients through the home buying process. Real estate agents play a vital role in managing expectations, facilitating communication between buyers and sellers, and ensuring a smooth transaction from pending to closing. By staying informed and up-to-date on the status of pending sales, you can provide valuable guidance and support to your clients.
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