If you’re on the hunt for a new house, you’ve likely been scoping out all sorts of listings online. Out of all the thousands of listings that you come across, you may have stumbled upon one that you can really see yourself living in.
The problem? The listing says “pending sale,” which means an offer has been accepted by the seller, but the scheduled closing date still hasn’t arrived and the sale is not yet finalized. Once a contract has begun, a home is considered to be in pending status.
But that doesn’t mean the sale is a done deal – there’s still a chance that the home might still be available for many reasons. Perhaps financing might fall through or a home inspection reveals issues that the buyer isn’t willing to deal with. The home isn’t completely off the market just yet, and it might not necessarily be too late for you to get your hands on that property.
Most real estate contracts include contingencies that essentially make the deal dependent on the fulfillment and removal of them. Common contingencies include mortgage approvals, home inspections, appraisals, or sale of the buyer’s property.
A deal that’s pending is one in which all contingencies have been removed, at which point the buyer is committed to the deal. But at the end of the day, “pending sale” does not mean “sold” just yet since it’s still pending the final closing.
With a sale contingent on these clauses, buyers are essentially telling sellers that they have full intention of closing, but they want to be certain that the home is free of major issues and that they are able to get approved for financing. Should any one of these contingencies not be met, buyers reserve the right to walk away.
Even if all contingencies have been met and removed, a buyer can still exit the deal. Sometimes buyers may suddenly be involved in an urgent situation that requires them to bail out of the deal, or sometimes they may simply have a change of heart. If you fall in love with a particular home that’s pending a final sale, there may still be a chance for you to swoop in, though it’s still wise to be realistic and not get your hopes up too high.
The Property May Still Be “Active” Despite Being in the Middle of a Deal
Some agents may list a home that still has contingencies to be met as “active” and still available for showings. This informs buyers that the seller is still open to entertaining other offers while waiting for escrow to close just in case the deal that’s currently on the table falls through. While the seller can’t enter into a contract with another buyer during this time period, the sale isn’t yet complete.
That means buyers can still submit a “backup offer” in case the current offer doesn’t go through. Not only is this advantageous for the buyer, the seller can also benefit by going directly to the backup. If not, the seller will essentially have to go back to square one.
Express Your Interest in the Home
There’s nothing wrong with showing the seller that you’re very interested in the home and are willing to submit an offer while the initial offer is still in the works. You want to be right there waiting if that happens. In addition to drafting up a backup offer, consider sending the seller a handwritten letter detailing your appreciation of the home and why it would make the perfect place for you and your family. There have been plenty of deals that gave favored buyers who extended such gestures.
Consider Offering a Much More Attractive Offer
If you do decide to submit a backup offer, you should think about making it an extremely attractive one in terms of the offer price. Only if you are financially capable and comfortable, you might want to consider offering over the asking price. If you can’t justify the extra money, consider offering to pay for all of the seller’s closing costs, or agreeing to whatever closing date the seller wants. Whatever you can do to sweeten your offer, the better.
The Bottom Line
While you don’t necessarily want to get your hopes up that a pending sale with fall through, you also don’t have to give up on that home just yet. Keep your options open, and take measures to keep your foot in the door and be at the front of the line if the sale does not close. Anything can happen, and if it does, you’ll be prepared to step in and snag that home.