When searching on the internet via real estate sites like www.828RealEstate.com, it’s common to find MLS Real Estate listings that are marked as Under Contract or Pending. While people may interpret pending real estate to mean that the home is sold and off-market, that is not really the case!
Why NC Properties Pend Before Contract
In the High Country of North Carolina’s Matrix Multiple Listing Service, a property is marked as Under Contract when both the buyer and seller have agreed to terms and signed a written contract. Depending on which site you found the home on, be it 828RealEstate.com, Realtor.com, Zillow, or elsewhere, the property listing may show as Under Contract or Pending.
Price is the easiest to understand yet may not be the easiest to negotiate. In today’s market, 47% of homes have sold for over the seller’s asking price, sometimes with an all-cash offer! That means, the price you see on an online real estate listing has a great chance of being under contract for an even higher price than advertised.
Pending terms to a real estate contract can include price, due diligence fee, earnest money deposit, personal property inclusions, time frames, and more. It’s important to work with a knowledgeable Realtor in your area of interest to make sure that all of the terms are covered and to get a leg up in the negotiating process.
Types of Pending Listings
Your Realtor will help you know what different types of pending listings are common in your area. These terms of contracts can show you what it will take for you to win the home of your dreams!
Due Diligence Period
Due diligence is a fee that the buyer pays directly to the seller for the privilege of taking time to secure a loan or gather funding, complete all home-related inspections and determine that they are moving forward to purchase or “close” on the home.
Should the buyer decide not to proceed with the purchase, they must terminate their contract within the Due Diligence period in order to have their Earnest Money Deposit refunded to them. The Seller will keep the Due Diligence fee no matter what.
Held in Escrow
The Earnest Money Deposit is an amount from the buyer which is held in the Escrow Account of their closing attorney. When filling out the offer, the buyer chooses which NC attorney they will use to handle their side of the closing. This is whose Escrow or Trust account to which they will write their Earnest Money Deposit. Should the buyer choose to terminate their contract within their contracted Due Diligence period, the Earnest Money Deposit is usually refunded to them.
Waiting on Contract
It’s important to note that, in the state of North Carolina, a verbal agreement does not constitute a binding contract. Offers must be in writing and signed by both parties to be considered an official or executed ‘Contract.’
Once both parties come to an agreement on all of the terms, it’s important to sign as quickly as possible. Your Realtor is responsible for negotiating the terms on your behalf, for conveying acceptance of terms, and for obtaining your signatures and sharing the signed contract with the other party through their Realtor, if they have one.
Other MLS Listing Statuses
You might see other MLS Listing statuses when searching for properties online. Here are the meanings behind statuses you may see on various real estate sites.
- Back on Market: A property that is labeled as “Back on Market,” was Under Contract/Pending before the contract was terminated and once again listed for purchase.
- Temporarily Removed: A property can be marked as temporarily removed if a property requires immediate repairs due to damage or the seller needs to suspend marketing and showings for personal reasons.
- Expired: This means the listing agreement with the Listing Agent has expired at its set end date. The seller may choose to re-list or to keep it off the market.
- Withdrawn: A withdrawn listing means that the Seller has left the Listing Agreement with their Listing Agent for whatever reason.
Do Pending Home Sales Ever Fall Through?
An Under Contract or Pending status on a home may still mean the sale of the home is contingent upon one or more factors. There are many more reasons a pending home sale could fall through.
Sometimes property transactions don’t work out or owners might change their minds about selling. That being said, the property listing will still read as “Pending” or “Under Contract” depending on which real estate site you are looking at.
Home Sale Contingencies
Sometimes pending homes will fail because of home sale contingencies. These terms and circumstances must be met for the seller to finally accept a buyer’s offer and move forward with closing and finalizing the purchase of the home.
MLS Listings will not describe the contingencies written in a pending contract. You can ask your Realtor to try to find out other reasons the sale didn’t work out if you are interested in the property.
Contingencies may include ‘Loan contingencies,” meaning the buyer must get a loan approved before they can close. A sale may be contingent on a home inspection, meaning that the buyer must be comfortable with the results of a home inspection to move forward or start a new negotiation with the seller for specific repairs. The sale might be contingent upon the buyer selling another home before they can purchase the new one.
Making an Offer on an Under Contract Property
If you would like to make an offer on a Pending or Under Contract property, you should consult with your Realtor on the best way to do this. Your Realtor can find out if there are contingencies with their current contract or if the sellers are even willing to accept “Back-up Offers.”
If yes, you may submit a Back-up Offer which is an Offer to Purchase combined with a Back-Up Offer Addendum. If Buyer and Seller agree upon terms and both sign, it would then be the ‘Back-up Contract. The Back-up Contract sits in 2nd place until which time the 1st Contract closes, the Seller notifies the Buyer that they are now the Primary Contact, or the Buyer cancels their Back-up Offer, whichever comes first.
If the seller is not willing to accept a backup offer, and you are very interested in the property, keep your eyes on the status of the home in case the first contract terminates. Sometimes loans are not approved, Buyers change their minds about buying or finding a home they like better, or circumstances change.
You Might Get the Property
In today’s market, Buyers are making quick decisions in order to get a property Under Contract. There are many reasons that a contract might be terminated, so keeping an eye on pending and under contract MLS Listings might get you the property of your dreams.
Ask your Realtor to keep their eyes on the status along with you so if anything changes you may still be able to make an offer and have a second chance at the home! There are many terms and facets of making offers and purchasing a home or land. It’s important to have an experienced Realtor on your side to navigate the ins and outs and to describe all of the terms and processes to you as you go.
Read reviews, ask your friends for referrals, and do your research to find a Realtor you’ll feel comfortable with and who you feel confident will work diligently for you!