Wednesday, April 17

What Is a Pending Home?

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A pending home means that the seller accepts an offer, but the deal hasn’t officially closed yet. A home or property will be in pending status once the contract is executed.

When this happens, the property isn’t defined anymore as an active listing. During this time, the listings are pulled on public sites such as Redfin, Trulia, and Zillow. When a deal is considering pending will depend on your location.

A home remains pending until the loan closes once the legal work is done. If your dream home is pending then don’t lose hope just yet.

Some sellers still allow offers to be made on the house, just in the case the deal falls through. You never know when a deal can fall through, especially if it involves a home loan for bad credit.

Reasons a Home Can No Longer Be Pending

There are a few reasons why a home may no longer be pending, and the deal falls through.

Finances and Bad Credit

Homebuyers may not be aware that an innocent transaction, such as moving cash from one account to another or making a large credit card purchase, can actually jeopardize the whole mortgage process. Applying for any new credit or getting more debt can affect the eligibility to continue the loan process.

If there is a financial transaction that disqualifies a buyer from continuing with the loan then the pending sale falls through and the home goes back on the market. If you have a home loan for bad credit, you will need to be even more careful as your bad credit puts you in a fragile state for your loan approval.

Title Issues with the Property

When a contract has been written up, the buyers start the loan process. During this time, the title work on the property is reviewed. Sometimes there are delinquent bills or liens on the property from the current owner that can affect the process.

If the liens aren’t taken care of by the seller and cleared, the lender isn’t able to go through with the sale. Errors on public records can also prevent the sale from happening.

Filing or clerical errors on the survey of the property or deed can cause financial problems that must be resolved so they are often not taken care of and the sale falls through. The pending home once again goes back on the market.

Other Conditions

A buyer will usually have a property inspection done before closing. An inspector looks at the foundation, attic, roof, appliances, and other items to make sure things are in working order. If there are issues that are found that need attention then the borrower may list “contingent upon” conditions on the contract.

It can also be referred to as “subject to” conditions on the contract. If the seller doesn’t fix the issues then the borrower can exit the contract, usually without any penalties, which then removes the pending status.

It’s not very common for a deal to fall through once the contract is written up but it does happen. If you have a home in mind that is listed as pending then it’s always a good idea to follow up.