Changes in Pending Sales Trends: Here’s What You Need to Know
A Close Look at “Pending” Home Sales and What They Mean
Many of us have had the experience of searching a real estate market with limited inventory for the home of our dreams, only to find it – and then discover a “pending” sticker slapped on the for sale sign in the front yard. Most of us believe that pending means that we’ve lost our chance to purchase the home until it comes on the market again, perhaps several years down the line. But that may not actually be the case.
So much depends on what that word “pending” actually means. The trouble is, the definition has a tendency to vary. Indeed, in some markets, there may even be a legal definition established to govern what “pending” can and can’t mean. What follows is a quick guide to the various conditions – the “subject to” and “contingent upon” items that can affect what pending actually means in any given scenario.
Subject To… What?
If you’re a first-time homebuyer, or if it’s been a while since you purchased a property, you may not have your head fully wrapped around the home buying process just yet. Regardless of your understanding, it may pay to have a quick refresher course.
When a buyer makes an offer on a home, that offer is nearly always dependent on a few things. Chief among them, depending on where you live and your financing options, are an inspection and an appraisal of the home — what the home is subject to.
Contingent on… What?
The offer can also be contingent on the buyer’s qualifying for financing, or even contingent on them selling their prior residence first, or anything else they can work into the deal as the law allows and the seller will agree to.
This is where it gets complicated and why it pays to have a professional in your corner when you’re going through the buying process. Contingency contracts are not by any means the rule, but they definitely have their place.
Truly Pending—On the Road to Closing
Most real estate agents would never dream of listing a sale as pending until all of these contingencies have been met. When all the roadblocks are out of the way and the sale is on its way to closing, then it is truly pending.
Additional Offers on a Home
It may not only be possible to make an additional offer on the property, but additional offers may also be encouraged by the Realtor. Just because the deal has advanced to this stage doesn’t mean that it’s foolproof. Buyers sometimes back out of deals and walk away from their earnest money. Banks change their funding qualifications all the time. Change happens, and sometimes opportunities open up for a new buyer to take advantage.
A Wise Person Once Said…
It ain’t over until it’s over. If you’ve found the home of your dreams listed as “pending” there may be time to get an additional offer in. Even if all of the buyer’s contingencies have been met, and all of the “subject to” items have been ticked off, there could still be unforeseen circumstances that will open the home up to a second offer.
Get your offer in while there’s time, and you might just land that dream home just yet. If not, there are always other homes, and always other sellers.