Congrats, the sale of your new home is pending! That means your offer has been accepted, the home has passed inspections, and you’re onto the final phase of the buying and selling process. Unfortunately, that doesn’t necessarily mean smooth sailing from here on out. 

The pending status on homes is a loaded term. We spoke with experts to get their advice on how to proceed through this sometimes difficult stage, with tips on everything from how sellers can entertain backup offers to timing your potential move. 

While that pending status can sometimes be an uncertain time if you’ve made an offer already, it’s good news if you’re still a prospective buyer and you spot your dream home on the market with a status listed as pending.

“A home is not off the market until the sale is closed. Anything can happen until the sale closes,” says Andrew Pasquella, a Realtor at Sotheby’s International Realty. “Keep homes on your list until they are fully sold. Miracles happen in real estate on a daily basis.”

When a buyer makes an offer on a home and that offer is accepted, the home is considered under contract. From there, a buyer can have inspections performed and can back out based on the results of those inspections or the subsequent negotiations. But assuming those parts of the process go smoothly, a home will be consider pending once those contingencies are resolved. 

“Pending is the last stage of the selling process. This is when the buyer has released all of their contingencies and this property is pending sale,” Pasquella says. “This is also a time when the buyer, who has most likely put down an earnest money deposit of 3% of the purchase price, also releases that deposit.”

The true definition of pending means all parties have satisfied their ends of the contract and the home is simply awaiting closing day. However, you might notice there are some gray areas between those stages.

Christian Barnes, president and CEO of Better Homes and Gardens Real Estate Kansas City Homes, explains that there are some stages along the way that have wildly different meanings but still might suggest that the home is simply pending. 

Some properties will be considered pending, but notes will also show that they are considered either “active under contract” or have a stipulation that they can be “shown for back up.”

“This means there is an executed contract, however the seller wants to continue to show the property and will entertain a back-up offer—think of this as insurance in case the current contract doesn’t close,” Barnes says. “This can also be used if a third party or court still has to approve the sale.”

Some home have offers but are considered “contingent” because there are additional contingencies the buyer must meet outside of typical inspections, appraisals, loan approvals, etc., Barnes says.  

“The most common of the additional contingencies occur when a buyer has a property to sell and either needs to get it listed and under contract or have a successful close,” she explains.

When a home is truly pending, that means all of the contingencies of the sale have been satisfied and all that’s left to do is wait for closing day. At this point, Barnes says sellers are no longer showing the home. 

If you’re confused or unsure about a home’s status, ask your agent. Agents have access to accurate MLS information, while Barnes explains that sites such as Zillow don’t always have the details of contingent offers on their sites, so it’s important to ask after a property you’re interested in. 

As the buyer of a property, a pending status marks the end of home inspections and detailed negotiations. Now it’s time to get serious about finding movers, filing your change of address, packing, and scheduling the transfer of your utilities as you plan for closing day. You’ll be submitting tons of final paperwork to your lender, the bank, and your real estate agent during this time, so while you’re mostly waiting, you’re also doing that work.

“Something that can often be overlooked in this time period but is equally as important is obtaining quotes on homeowners insurance,” Barnes says. “Doing this during the inspection time period is critical, as most insurance companies will do an assessment of the home to ensure insurability. That is not a surprise you want to get a few days before closing.”

Just keep in mind that things can fall through for a number of reasons, and you don’t want to make hasty plans weeks and weeks out. Delays can also occur. 

“In roughly 10 to 12% of all real estate transactions, a home goes under contract and ends up back on the market,” Barnes says. “Once a home is pending with no showings, it most often closes.” 

If a home sale does fall through at this stage, Barnes says it is likely due to the fact that the buyer could not secure a loan following their preapproval.

Finally, Pasquella says the most important thing is not to make any major financial changes as you prepare for your next exciting chapter. That includes making major purchases, taking out new loans, etc. All of these choices can affect your credit score and your fitness as a new loan borrower in the eyes of the bank. 

“That said, it’s always better not to make any financial commitments until the sale is done, but it’s always fun to daydream and plan for the future,” he adds.

As a seller, you should keep your options open. And if you’re a buyer enamored by a home with a pending status on MLS, you can likely still tour the property and make offers. 

“Most sellers would be encouraged to accept backup offers,” Pasquella says. “In fact, most listing agents will want to continue to show the property until the house sells—let them!”

Back-up offers can only come into play if the initial offer falls through. In other words, a seller can’t entertain a back-up offer simply because it’s higher or better than the original while a home is under contract. 

“The most common way back-up offers become primary is during the inspection renegotiation period,” Barnes explains. “For example, if the buyers and sellers don’t come to an agreement on improvements recommended by an inspector, the primary contract might cancel and thus the back-up offer would come into play.” 

But in rare cases when a home has been pending and the sale falls through just prior to closing day, these back-up offers are great to have on hand.

Lesley Semmelhack of the Corcoran Group in Brooklyn, New York, says it pays to be aggressive when making a back-up offer on a pending property.

“If possible, offering a bid over the list price will likely garner the full attention of the seller,” she says. “Being flexible with your terms, the closing date, and other contingencies is another strong sign you are ready to ‘play ball.’ If the buyer with the accepted offer is drawing out the purchase process or otherwise proving unresponsive or difficult, you want to be a compelling plan B for the seller.”

As a buyer, you can back out of a deal at any point up until closing. The problem is you might then forfeit your escrow deposit. If you’ve gotten near the finish line but decide to back out, you’ll be out the money you put down in cash. The house will then go back on the market. 

Pasquella explains that, at this point, a buyer has likely put down earnest money amounting to about 3% of the purchase price and has released that deposit.

“If the buyer does cancel escrow during pending, they would forfeit that deposit and risk further legal action,” he says.

Once your offer is no longer pending, the only status left is for it to go back on the market or fully close, signaling the end of the deal. Let’s say your buyers are still on board and you’ve all satisfied your requirements. That means your home is officially closing.

Similarly, if you back out or can’t reach an agreement with the buyer, the home will likely go active or available on the market again. That’s why it’s great to entertain back-up offers, because it can mean you have an offer in the wings to proceed with quickly instead of having to wait for another interested party to discover your home.

Once closing day rolls around, all you’ll have to do is sign heaps of paperwork and secure the keys to your new digs!

Source: What Does Pending Mean in Real Estate? Better Homes & Gardens (June 5, 2023) Kristine Gill