Introduction
Understanding the status of a property listing is key when navigating the home buying process. One common term you’ll hear is “pending.” Let’s explore what this means for homebuyers, particularly in the Bay Area real estate market.
What Does “Pending” Mean?
Pending. When many of us hear this word we think “about to happen” or “awaiting a decision.” You’re in a waiting zone, because something is going to happen, but its status is “not quite done yet.” When a property listing is marked as “pending,” it means that an offer on the home has been accepted by the seller, and the sale is in the process of being finalized, but the transaction has not yet closed. During this time, the following typically occurs:
- Contingency Removal: Any contingencies in the contract, such as those for financing or inspections, are being addressed and removed.
- Finalizing Financing: The buyer is completing the mortgage process, including appraisal and securing the loan.
- Closing Preparations: Both parties are preparing for the closing day when the transfer of ownership will occur.
So far, so good.
Popular Confusions
- Pending vs. Under Contract: Some regions use “under contract” to describe this interim phase. While similar, “pending” is a term we use in the Bay Area per custom, and it means a contract has been accepted, and various milestones need to be met before the transaction can close. “Under contract” is similar to “pending” and may be used in other jurisdictions to indicate that contingencies are still being addressed.
- Is a Pending Property Still Available for Offers?: While a pending status generally means the seller is moving forward with the current buyer, in some cases backup offers may still be accepted. If so, a buyer with a backup offer position would be automatically moved up and into contract if they are in backup position #1, and the property would not be re-listed on the MLS. Although it’s not common for a sales offer to fall through, it does happen.
How to Make the Best Use of This Information
- Monitor the Market: Keep an eye on pending properties as they may come back on the market if the sale falls through.
- Understand Timing: Recognize that pending status indicates the sale is progressing but not yet complete. The time from pending to closing can vary. In our Bay Area market the average duration from pending status to closing is between 21 and 30 days.
- Be Prepared: If you’re interested in a pending property, be ready to act quickly if it returns to the market, or make a backup offer that the seller will accept to assure your opportunity to get into contract if the sale falls apart.
Local Expertise
- Market Dynamics: The implications of a pending status can vary depending on the local market’s dynamics. In our market, pending sales are less likely to fall through, but it’s not unheard of.
- Strategies for Buyers: In a sellers’ market, understanding the meaning of pending can help buyers strategize their home search and offer process. Working with a highly respected agent helps; they will track the home closely through online resources.
“Pending” status is a crucial phase in the home buying process, indicating that an offer has been accepted and the sale is moving towards closing. Understanding what this means and how it’s handled in our Northern California market can help buyers navigate their home search and purchasing strategies more effectively.