If you’ve made an offer and it’s been accepted, you may see these labels on the property you plan to buy. If you’re looking for a property, you may want to bypass that listing in favor of active listings since both labels indicate the sellers have accepted an offer for their home. However, if you think you’ve found the perfect house in the right location and it fits in your budget, it may be worth a discussion with your buyer’s agent. You can always ask your agent to talk to the listing agent to find out how likely the sale is to go through and whether the sellers might be willing to accept a backup offer in case the first one falls through.
We asked Amy Berglund, a real estate agent with Re/Max Professionals in Denver, to explain what the term “pending” typically means for buyers and sellers. She replied in an email.
Q: What does “pending offer” mean, and what’s involved? Why is it pending?
A: A pending listing is one in which a contract has been accepted by the seller and agreed upon by all parties. The contract has been officially executed and all parties are moving through the contract toward closing. A listing is not pending until all parties have signed the contract or the counterproposal to the contract.
Q: How long can a house be listed under “pending offer” before it goes through?
A: A typical escrow period is 30 days, but some loans take longer to process, such as jumbo loans, which can take 45 to 60 days. If it’s a vacant listing or if cash is being offered, sometimes deals can close in as little as two weeks — just enough time to check the title and conduct an inspection. Sometimes, buyers and sellers need a longer closing and negotiate a 45- to 60-day closing. Anything longer than a 60-day closing is unusual.
Q: In what situations would a long pending offer, such as multiple months, occur?
A: A longer pending offer may be due to a number of factors. One possibility is that the buyers and sellers have a specific need such as moving out of state or waiting for school to be out and all parties have agreed. Another long pending offer could happen if someone is purchasing large tracts of land where in-depth environmental inspections need to occur because those can take a while.
Q: How does this change when it’s a short sale or if repairs need to be made?
A: In a short sale, once an offer is accepted by the seller, the offer then has to be approved by the bank that is taking the short. Sometimes that can happen fairly quickly, such as within a month, and sometimes it can take much longer. If it’s a home with two loans, then all banks have to agree and that can take many months. Once the banks all agree, then the typical 30-day contract period ensues.
A property that needs significant repairs could need an extended pending sale to allow time for those repairs to be made. These types of repairs would typically be roof replacements, sewer lines or foundation repairs.
Ultimately, never feel bound by what’s “typical.” I’ve found that each real estate deal is unique because each person involved has a unique set of challenges and needs. If a 30-day closing period isn’t optimal, then always feel free to ask the other party if they have flexibility around that. Always ask.