If you’ve ever browsed commercial real estate listings online, you’ve likely noticed that some are labeled “pending.” It’s a listing status that most properties go through between the time they’re first marked “for sale” and when they’re eventually “sold.” But what exactly does it mean?
What does pending mean in real estate?
In commercial real estate, “pending” means the seller has accepted a buyer’s offer on the property, but the deal hasn’t closed yet. Typically, the seller and buyer have met all contingencies and are waiting for the sale to finalize.
However, there’s still a small chance the deal could fall through.
Pending vs contingent homes
Though related, “pending” and “contingent” don’t mean the same thing. Here’s a breakdown of the two listing statuses’ similarities and differences:
| “Pending” status | “Contingent” status |
| The property is under contract | The property is under contract |
| Seller and buyer are working toward a sale | Seller and buyer are working toward a sale |
| Contingencies have been met | Contingencies have not yet been met |
For example, many buyers make their purchase offer contingent on the property passing a professional inspection or their ability to secure financing. Once all contingencies have been met, a property will move from “contingent” to “pending.”
Understanding real estate transaction stages
Here’s how the “pending” status fits into the entire real estate transaction lifecycle:
- Listing: This is when a seller lists their property on the market with an asking price.
- Offer and negotiation: This is when a buyer submits an offer and negotiates a purchase agreement.
- Offer acceptance: Once both parties agree on sale terms, the seller accepts the offer.
- Due diligence: This is a set period during which the buyer can conduct inspections, secure financing, research the title, and clear other contingencies.
- Pending: Once all contingencies are met, the property is listed as “pending” while the sale moves toward closing.
- Closing: Ownership is officially transferred from the seller to the buyer, and the sale is finalized.
Types of pending statuses in real estate
Some real estate marketplaces further categorize pending listings into subcategories:
- Pending–Taking backups: The seller has accepted a buyer’s offer but is still open to backup offers in case the current deal falls through.
- Pending–Continuing to show: The seller has accepted a buyer’s offer but is still allowing showings in case the current deal falls through.
- Pending–Do not show: The seller is no longer showing the property or accepting new offers.
- Pending–Over 4 months: The property sale has been pending for over four months, which is longer than usual.
These distinctions help buyers gauge whether they still have a chance to make an offer or if the property is likely to close without issue.
Why are properties marked as pending?
Typically, properties are marked as pending because the seller has accepted an offer, and all contingencies have been met. This means the property passed its inspection, appraisal, title search, and other due diligence requirements.
However, the sale still hasn’t been finalized. This often means the financing is still being processed, and there are still closing documents to be signed. Once these last steps are complete, the property will be marked as “sold.”
Can you still buy a pending property?
If you come across a property that’s already marked “pending,” it’s unlikely you can still buy it.
However, some sellers may still accept backup offers in case the deal falls through. This could happen if the buyer is unable to secure financing, the property fails its inspection, the appraisal comes in low, there are title issues, or the buyer gets cold feet (though many of these scenarios are often already accounted for by the time a listing is pending).
In this case, the seller may accept your backup offer or list the property back on the market.
How to make an offer on pending real estate
Let’s say you want to try your luck at buying a pending property. To boost your chances of success, carefully follow these steps:
- Contact the listing agent: Ask them if the seller is open to backup offers, what contingencies remain to be settled, and whether there’s any flexibility in the deal.
- Prepare your offer: If you get the green light, draft and submit a competitive offer. The more favorable it is to the seller, the more likely they are to accept it as a plan B.
- Have financing ready: Get pre-approved for a mortgage or arrange proof of funds if you plan to pay with cash. This shows that you’re ready to seal the deal.
- Show you’re serious: On top of securing financing, consider committing a large earnest deposit to show you’re serious about the deal. A personal letter might help, too.
- Be flexible: Be open to adjusting the closing timeline based on the seller’s needs. They may want to move quickly after the original closing date fails.
- Keep in contact: Stay in touch with the seller’s real estate agent to stay informed about any listing changes or updates.
Common scenarios where pending sales fail
Most pending sales lead to a successful sale. However, every now and then, a pending sale falls through. Here are the most common reasons why this happens:
- A low appraisal: If the property appraises for less than the agreed-upon purchase price, the lender may refuse to finance the property. After all, the property serves as collateral on the loan, and most lenders only lend up to a certain LTV (loan-to-value) ratio.
- Buyer withdrawal: Though they may lose their earnest money in the process, the buyer may back out of the deal due to financial, personal, or other reasons.
- Failed financing approval: Even with pre-approval, buyers can have their loans rescinded due to changes in the buyer’s income, credit, or investing strategy.
- Issues with the property title: A title search that uncovers previously unknown liens, ownership disputes, or other encumbrances could motivate the buyer to back out of the deal or even prevent the sale from happening from a legal standpoint.
- Property inspection issues: If the property inspector discovers any major building issues—such as foundation damage, environmental hazards, or broken utility systems—the buyer may call off the sale.
- Seller-side issues: In rare cases, sellers may also back out of a deal due to personal reasons, changes in market conditions, or disputes over contract terms. However, this could lead to legal challenges if the property is already under contract.
How long does a pending sale last?
A pending sale can last anywhere from a few weeks to two months or longer. It all depends on the size of the property, the complexity of the deal, and the number of contingencies. Any complications from financing issues, low appraisals, or required repairs can delay the final sale.
Best practices for buyers interested in pending properties
If you’re interested in buying pending properties, here are some best practices to follow:
Stay in contact with the listing agent
As long as the property sale is pending, stay in regular contact with the listing agent. They can give you updates and let you know if and when the seller will accept backup offers. Meanwhile, you can reassure them that you are willing to step in as the buyer if needed.
Evaluate the property’s history and condition
While you’re waiting to see if the sale falls through, start doing your due diligence on the property. That way, you don’t have to waste any time if you get a shot at buying it. Start by reviewing the property’s sale history, past inspection reports, and any disclosures to ensure it meets your investment criteria.
Consider alternative financing options
A cash offer or a large down payment could make your offer stand out—especially if failed financing caused the original offer to fall through, so get creative with your financing method and consider raising equity from other investors (instead of taking on more debt).
Be prepared for delays in the process
Some pending deals take longer than expected. If it’s a large sale or involves many contingencies, stakeholders, or complex legal considerations, the sale is more likely to get delayed or canceled altogether. However, this is good news for you since it lets you step in with another offer.
Have your offer ready in case the deal falls through
Should the pending sale fall through, have your offer ready so you can act fast. This means drafting it in advance so you don’t have to waste any time submitting it. Consider minimizing any contingencies in your offer (within reason) to make it more attractive.
Understand the potential risks and benefits
While the pending sale could fail and give you a chance to buy, it could also go through, even after delays. This could result in wasted time and effort on your part. To minimize this risk, make sure you’re still exploring the market for other investment opportunities.
Ensure flexibility in negotiating terms
If the seller entertains your offer, be open to adjusting sale terms to align with their preferences. The deal still needs to be penciled out, but knowing how to negotiate real estate deals (including contingencies, purchase price, and other sale terms) can help you get your offer accepted.
Conclusion
At the end of the day, pending listings can be a unique way to find commercial real estate deals. While it’s rare that a pending sale will get called off, it does happen. This is an opportunity for you to step in with an even better offer while facing minimal buyer competition.
The key to success is to know how to navigate the real estate transaction process, negotiate real estate deals, and remain patient yet prepared for when a pending sale falls through. If you master these skills, you can often create a win-win situation for you and the seller.
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