Congratulations! You found your dream home!
Except… so did someone else. About two weeks before you. And now the home is “sale pending”.
So… does sale pending mean “your” home is off the market, or can you still make an offer and start shopping for the best home mortgages?
Below, we’ll take a look at what sale pending means, and what options it leaves you.
Sale Pending Is…
That period of time between the seller accepting the buyer’s offer and the actual contract being signed between both parties. The property is pulled from the Multiple Listing Service (MLS) and public sites such as Zillow and Redfin.
While offers cannot be formally submitted, you can still have your agent contact the seller and their representative to let them know there is an interested party with an offer should the sale fall through.
In some locales, the pending status may occur before or after inspections of the property and public records have been made.
Bad News First
The reality is only about 4% of sale pending homes fail to go the distance. In some states, such as California, owners are prohibited from backing out of a deal just because there’s a new offer. The buyer is the only one able to legally end the deal.
Also, it’s not uncommon for a deal which does initially fall through to come together in the following days or weeks.
Given the above, our best advice for buyers is to temper their hopes so that if a home does go to someone else, they can quickly move on.
A Word of Caution
Most commonly, a sale pending home will fail to close because something was found in the inspection—such as a lien or dry rot—and the buyer either decides to exercise discretion over valor, or they exit the deal because the owner won’t lower the price or make any needed repairs.
Also, if the buyer is unable to secure the funding within a set amount of time (generally 50 days), the owner can move onto your offer.
How to Make It Happen
Let the Owner and Agent Know You’re Interested. If the deal does fall through, you’ll want to have your backup offer already on the seller’s radar.
This has the added benefit of saving you from having to compete with other buyers if the property goes back on the market.
And don’t be afraid to bring a personal touch. If you legit love-with-a-capital-L the home, let everyone know that. Many sellers want to know their old home will be in good hands, and agents’ lives are made easier with committed buyers.
Up the Bid. If you are in a location that allows the seller to back out, and your pockets are deep enough, you may want to consider topping the other buyer’s offer.
You can also sweeten your bid by offering better terms such as waiving contingencies, accepting fewer repairs, etc.
Pay the Buyer. If the seller’s hands are legally tied, you can go the other way. Offer the buyer the same amount you would have offered the seller to keep looking.
The Bottom Line
The facts may be that the odds are not “ever in your favor,” but that doesn’t mean you’ve no chance at all.
However, it’s important to remember that there may be very good—and by that, we mean “bad”—reasons the deal fell through. Always perform your own due diligence, and if the upsides outweigh any discovered downsides, you may be moving into your new home sooner than you thought.
Want to learn about more options for making home-ownership a possibility? Answer a few questions here, and a home lending expert will contact you!