How To Make An Offer On a Pending Home Sale

Finding an ideal home only to see "pending" on the listing can be disheartening, but it shouldn't be. Most real estate websites will post "pending" as soon as a seller accepts an offer, but that does not mean the deal has gone through.

Read on to learn what "pending" in real estate means and how you can submit an offer on a pending home.

Can You Out-Bid a Pending Home Sale?

"Pending" means an offer was submitted, and the seller accepted it. While the deed and title haven't yet transferred, the accepted offer will likely include a clause that prevents the seller from canceling the sale should a higher bid come in. This means that you can't bump the current buyer by out-bidding. 

An Agent May Still Show A Home Even If It's Pending

Since a "pending home" is still technically for sale, agents may still show the home. However, this depends on the seller's wishes and how confident they are about the pending offer. 

The Difference Between Pending Sale And Contingent Sale

A contingent offer means that the seller has accepted an offer with conditions. Those conditions might be that the buyer still needs to apply for a mortgage or wait for the sale of their home. If the contingencies go through, then the sale moves into the pending stage.

The Difference Between Pending And Under Contract

Under contract means the seller accepted an offer, but the sale is still in its early stages. It could be that the seller has communicated that they are willing to accept the buyer's offer but has yet to move on to the pending stage.

Chances are higher to buy a home listed "under contract" than it is to buy one that's pending.

Reasons A Buyer Might Cancel a Pending Sale

An Unfavorable Inspection

Most offers include a clause that lets the buyer cancel the sale if the inspection reveals something severely wrong. If the inspection is less than favorable, the buyer may give the homeowner a chance to resolve it instead of outright canceling their offer. If they can't reach an agreement, the buyer has the option to withdraw the offer. 

Failure To Get A Loan

If the buyer can't get approved for a mortgage and they don't have the cash to purchase, the sale is canceled.

There are several reasons why a buyer may be unable to get a mortgage, such as:

  • A financial emergency that required them to drain their down payment funds

  • Inaccuracies with the buyer's income and assets

  • The lender thinks that the buyer is trying to use a loan for 100% funding (meaning that the buyer doesn't truly have a down payment)

Buyer's Remorse

Some buyers decide that they don't want a particular home anymore. Something as simple as job relocation can influence the buyer's decision to withdraw their offer. Other times it might be that they found another home that suited them better.

This situation doesn't occur too often, but it's still a common reason for pending sales to fall through.

Putting An Offer On A Pending Sale

Consider the Risks

You may not be able to see the home before making an offer, and should the first offer fail because of poor inspection results, you could be stuck with a problem. Explore other homes in the area before making an offer on a pending home.

Contact The Listing Agent

Ask your agent to contact the listing agent as they may be able to learn about possible dilemmas with the sale. Your agent can also express your interest --a crucial step for being next in line to buy!

Get Preapproved

Get preapproved for a home loan before making the offer. Preapproval is different from prequalification. Preapproval letters are stronger than prequalification letters when it comes to making an offer.

Submit A Backup Offer

Submit a backup offer for the seller to consider should the first accepted offer fail. Remember that the home already has a serious offer, so be aggressive.

Though most pending home sales close, several factors may lead to it falling through, so there's still a chance that you can buy it. The best thing you can do to prepare is to apply for a home loan and have your finances in order so that nothing holds you back.