If you have been out house hunting, you may have noticed some for sale signs with “sale pending” badges on them. What does it mean when a sale is pending? Here is what you need to know about a pending home sale:
A home sale is pending after a seller has accepted an offer and the contract between the seller and the buyer has been signed.
When the home sale is pending, it’s no longer considered active on the multiple listing service (MLS). The time-frame in which the deal is pending varies depending upon where you live. In some places, it is during the due diligence period when a property is inspected and its public record is checked to be sure there are not any legal issues. In other areas, the pending phase starts after the due diligence phase. Either way, pending home sales are considered a key indicator of market activity.
Due Diligence: In real estate, the period of time known as due diligence is an opportunity for you, the buyer-investor, to receive full disclosure of the facts and conditions of a potential asset prior to completing a transaction with the seller.
Once a sale is pending, the buyer needs to start preparing for the closing. The best way for the buyer to do this is to make sure the necessary professionals are on hand, including the mortgage lender, title insurance company, Realtor, and inspector. A real estate attorney is also good to have to help complete all legal documentation prior to closing. In most markets, the due diligence period starts once the contract is signed and lasts about 10 days. During this time, the formal application for the loan is submitted to the lender, and appraiser researches the house and area to determine the property’s market value. The attorney will comb through the home’s public documents to make sure there is nothing that could affect sale of the home. This period is also the right time for the buyer to closely examine the details of the house and the transaction to make sure there are no deal breakers. If both parties are ready to move forward and have agreed to waive the contingencies regarding inspection or appraisal, all that’s left to do is to wait until closing day.
The seller can relax a little more than the buyer while the sale is pending.
After the contract is signed, the seller pretty much just has to wait. The listing agent typically will schedule the inspection, appraisal or any other visits to the property, but the seller might need to be around to allow people in or to be present for the inspection. However, in some cases, the seller may decide to not be present for any of it.
It is important to note that once the contract has been signed, the seller cannot back out of the deal, while the buyer is legally allowed to cancel the contract. But, when negotiation takes place regarding issues found during the due diligence period, the seller can decide what to say yes to. For example, the seller can choose not to make repairs on things that surfaced during the inspection, or they can refuse to accept a lower price if the property appraises for lower than the sale price. The whole deal can fall apart if the negotiation does not go well, so it’s vital to have a Realtor who will help you through the process whether you are buying or selling.
The last step during the pending sale period is for the seller to move out of the home and leave it in good condition. It is a good idea to leave the home as clean as possible. The buyers will do a final walk-through a couple of days prior to closing. If the closing goes smoothly, the seller will finally be able to slap that sold sticker on the “For Sale” sign!
If you are in the market to buy or sell a home (or both), let me, Sandra Nickel, and my Hat Team of Professionals assist you with all your real estate needs! Call us today at 334-834-1500 and check out https://www.homesforsaleinmontgomeryalabama.com for more information.
Photo Credits: realtor.com, inc.com, usatoday.com