The real estate market is HOT for sellers right now. Now is the time to sell your home if you are thinking about it, but what does the current housing market mean for buyers?
Since the market is so competitive for buyers, homes are going for more than the asking price, and people are getting DESPERATE to find the right home at the right price for their families.
With that in mind, people are trying to find creative ways to purchase their dream homes. One method is trying to buy a home even when a home is not for sale, or the home has status on the market that is different than a “for sale” status.
There are many different types of real estate statuses on a home for sale. One popular one is a pending sale status.
If you are looking to purchase a home, you may be wondering what a pending status means and if you have a chance of purchasing a home that has a pending sale. Understandable.
Let’s look into this further by first discussing the meaning of a pending sale.
Let’s say that a buyer has found their dream house. They get excited and plan to call them tomorrow, but they find out that their dream house has a sale pending status the next day before they do.
So what does sale pending mean on a house?
Unfortunately, any person interested in a house with a pending status is interested in a house with an accepted offer from a buyer. In the current real estate market climate, it often happens that quickly.
At this point, the seller and buyer of the home have already negotiated terms and agreements through their respected real estate agents. These terms and agreements can include things like the price of the home, possession date, etc.
The pending period for a home on the market is just a period of time when the buyer is getting everything ready to purchase the home and goes over a few final steps.
These final steps could include the buyer submitting their offer over to their financial institution to approve a loan. This can also be a time where appraisals and inspections are done. This period typically doesn’t last more than two weeks.
Houses are moving to pending” status much quicker in today’s market because it is a seller’s market. There aren’t enough houses to keep up with the demand, and houses do not stay on the market for a long time in most situations before their status switches from “for sale”to “pending.”
A home with a pending status is not yet sold, so yes, you can make an offer.
A study performed by Trulia found that almost 4% of home sales fall through (depending on the market). So, while it is likely that a home with a pending sale status will sell with the original offer, there is still a small chance that the sale will fall through.
Until a home’s status is sold, there is a slim chance that another buyer can sweep in and make another offer. If you are in this tough position, don’t give up yet. There is a way you can make an offer on a pending home, but it is a complicated process.
My Thoughts: Making an offer on a pending home is a little more tricky than one that has a “for sale” status.
To make an offer on a home with a pending status, you can talk to your real estate agent about putting in a backup offer.
When someone submits a backup offer, they let the seller know that if the initial offer falls through, you want to purchase the home. This is a clear message to the seller that you really like their home and are willing to wait to see if the sale with the current buyer goes through.
A backup offer is definitely an option. However, putting in a backup offer on a pending home is a complicated process.
A backup offer is made in a legally binding contract. A person should always discuss strategy and the contract with their real estate agent before putting in a backup offer to discuss contingencies. Let’s look into this more.
In a backup offer situation, once the first accepted offer goes through, the person who put a backup offer in will be released from their contract, and any money they put in will be returned to them.
A person who has put in a backup offer should NOT make offers on any other homes before they are released from their contract (unless they want to purchase multiple homes). This is to avoid any legal trouble.
If a buyer finds another house they are interested in more and the house they put a backup offer in for, they need to make sure that they can cancel that backup offer before making the offer on the other house.
It is strongly suggested by many real estate and legal professionals to talk to their real estate agent as well as an attorney to see what legal steps need to be made to back out of their backup offer (if they even can without getting into a legal battle).
A pending home sale is one where the buyer has accepted the offer. Most of these sales don’t fall through.
The chances are that a house with a pending status will sell to the buyer with the original offer. Putting in a backup offer as a buyer can be a tricky process, but for a buyer interested in purchasing a pending home, it may be their only chance to live in their dream home.