What Does the Status, "Pending Lender Approval Mean"? or PLA

Real Estate Agent with Atlanta Communities Real Estate Brokerage GREC #208281

In the Atlanta multiple listing service there are specific terms used to signify various statuses of properties.  Sometimes it's a little confusing. 

"Active" means that the property is available. (At least that's what it's supposed to mean. The status is updated by the individual listing agent so it's only as good as the agent is at updating their listings.)  In today's hot market, it always pays to give the listing agent a call to confirm the status of the listing before you spend much time looking into it. Even though the MLS has rules that require agents to change the status of their listings within 48 hours of any change, many times it just doesn't happen.

"Pending Lender Approval" or PLA is the status that they came up with a few years ago in order to accommodate the large increase in short sale situations.  In a typical short sale scenario, a binding contract is negotiated with the seller but it is contingent on short sale approval of the seller's lender.  This isn't the lender who would be lending money to the buyer.  This is the seller's lender who holds the current mortgage on the property. In a short sale, the seller is trying to get his lender to take less than the full amount owed on the mortgage and to forgive the rest.  Without this short sale approval, the title cannot be cleared and the property can't be sold. Unfortunately, this short sale approval usually takes 3 to 6 months.

Many times you'll see the listing with a PLA status for several months and then see it go back to Active status.  This usually means that the seller's lender didn't approve the short sale, usually because they thought the price was too low.  Usually this can be seen when they put the listing back on the market at a higher price and add remarks such as "bank approved price".  Sometimes the original buyer doesn't qualify for his loan or the buyer just couldn't hang in there anymore to wait for the short sale approval.  In many of those situations you might see it come back on the market at a lower price.

"Pending Sale" is supposed to be used when there are no longer any contingencies left to be cleared and everyone is just waiting for the final paperwork to be processed and the closing to take place on the agreed upon date.  Things can still go sour but if it does, it usually means that the buyer will be losing their earnest money or that the seller can't clear the title for some reason.  I would estimate that about 90% of the pending sales eventually end up selling.  Some buyers might consider putting in a back up offer so that if the original contract falls apart for some reason, they will have their negotiated contract take it's place immediately. For homes that are "pending sale" this is a low probability strategy to be used only if the buyer has the time to wait it out and isn't too disappointed if they end up not getting it.

Your buyer's agent can help you investigate the history of a listing.  They can see when the changes in status have taken place.  Then they can call the listing agent and inquire about the reasons for these status changes.  With this information, you can get a better idea of the seller's situation in order to see if the property is worth pursuing.   



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About the Author:  Tim Maitski has been a full time Realtor since 1999. He has sold several hundreds of homes in areas around metro Atlanta.  Tim started with RE/MAX Greater Atlanta and is now with Atlanta Communities Real Estate Brokerage.


Along with blogging on ActiveRain, he provides one of the best real estate websites in Atlanta at www.HomeAtlanta.com .


His proprietary  "Maitski Line Reports" chart out the absorption rates over the past 14 years in 37 different market areas.  Know when it's a good time to buy or a good time to sell.    


His online Property Tax Calculator allows you to compare property taxes in many counties and cities around the Atlanta area.  He provides the Atlanta MLS Power Search Tool that allows searches of homes using over 35 specific criteria.


Over the years, Tim has optimized his business so that he now can offer a huge 50% commission rebate to his buyers.  The more experience one gets, the easier the job becomes.


Tim also has a "Five Days to Sold" System that uses an intensive marketing blitz to create a showing frenzy that creates urgency and offers.


Tim is always looking to LinkIn with anyone who is interested in building their social network.


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  1. John G. Johnston 12/28/2012 12:00 AM
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