A pending sale on your preferred home doesn't mean all is lost
You've found the perfect property for you. It's within your price range, in your preferred community, with most if not all of the features on your checklist.
Then you check up on the listing again and get a sinking feeling in your stomach. The home is no longer described as being for sale, but is instead designated "sale pending."
At time point, you might bid a sad farewell to the one that got away and continue your home search. But a pending sale doesn't necessarily mean that the transaction will be completed. By keeping tabs on the property, you may be able to snag it if the first offer falls through.
Check with your real estate agent to find out the status of the transaction. Margaret Eby, writing for Realtor.com, says a pending sale typically means the seller has accepted an offer from a buyer, but there is still a period where the sale has to be worked out before it can be finalized. However, it can sometimes mean a sale is just around the corner. Brendon Desimone, writing for the real estate site Zillow, says some agents won't describe a sale as pending until all of the contingencies have been resolved the buyer is committed to the purchase.
The listing may also have labels such as "active with conditions" or "active continue to show." Kevin Lisota, writing for the Seattle real estate resource findwell, says a sale may be listed as contingent if the purchase will only go through after the buyer is able to sell their own residence.
Find out if the seller is still able to accept offers. In most cases, a seller who has accepted an offer must work with this potential buyer and cannot consider other buyers unless the offer falls through. However, you can still submit a backup offer for the seller to consider if the current transaction collapses.
A pending sale can fall through for several reasons. Bill Gassett, a Massachusetts Realtor, says the buyer may no longer qualify for financing if they have lost their job or otherwise had significant changes to their debt-to-income ratio. Elizabeth Weintraub, writing for the financial site The Balance, says buyers sometimes sabotage their purchase when they take out a car loan or otherwise compromise their financial standing.
Certain contingencies can also cause the sale to be nixed. An appraisal may determine that the home is worth less than the sales price. The buyer might agree to make up the difference, or the seller might lower their asking price, but the transaction may not go through if the parties can't reach an agreement.
Buyers usually include a home inspection as a contingency, and this inspection may turn up some serious issues. Gassett says some of the most common problems turned up by a home inspection that can inhibit the sale include high radon levels, mold, lead paint, or a faulty well or septic system. While these issues can often be resolved by the seller agreeing to repair them or lower the price to offset the expense of the work the buyer will have to do, the home might go back on the market if a disagreement over the problems occurs.
The sale can also be scuttled if a problem is discovered in the property records. There might be a defect with the title, such as an unknown easement, or there might be a lien against the property for unpaid property taxes or other expenses.
A buyer may back out of the transaction if they find that the seller or their real estate agent hasn't been forthcoming or has been dishonest in their representation of the property. For example, a buyer may be upset to discover that the home was the site of a murder or that the listing has provided an inaccurate count of the bedrooms and bathrooms.
In some cases, a buyer second-guesses their decision and decides to walk away before the sale is complete. Weintraub says sales usually have a period of a few weeks where a buyer can decide to withdraw their offer and retrieve their earnest money deposit. Desimone says buyers rarely back out of the contract after all contingencies are resolved, since they'll lose this deposit, but may do so if they have a family emergency or other situation that makes the home purchase less feasible.
By keeping up to date on the listing and submitting a backup offer, you'll get a chance to purchase the home if it comes back on the market. Eby says you can also work with your agent to come up with an offer that will be more competitive than the first prospective buyer. This might include a higher price, but you can also come up with a strong offer by waiving contingencies or offering more flexibility, such as giving the seller more time to move out.
However, you should also be aware of any issues that may have scrapped a pending sale and decide whether they're serious enough for you to walk away from the home as well. Even if you're attracted to the property, you may not want to be saddled with expensive home repairs or paying off the seller's outstanding liens in order to move in.
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