What does Sale Pending mean? Can I still look at a house in Iowa City that is Sale Pending?
When a house is Sale Pending it means that the typical contingencies for inspections and financing have been met and buyers and sellers have moved into the last phase of the contract. Sellers are typically pretty confident that the transaction will close and are not interested in having “back up” buyers view their home once it’s Sale Pending and seldom allow showings. From your perspective as a buyer there’s very little point in viewing a home that is Sale Pending anyway. By this point in the transaction it really is just an outside chance that the deal falls through. Why would you waste your time?
Judging by other posts I’ve read on the subject, the definition of Sale Pending may vary depending on the MLS. I’m a member of the Iowa City MLS and these rules are for the Iowa City area. If a house is marked Sale Pending on the Iowa City MLS it means that the buyers contingencies have been met in the purchase agreement. This does not mean the house is ready to close, because not ALL contingencies have been met. Inspections have been done, the bank has issued a financing commitment letter. Those are the main contingencies buyers include, I’m not covering specific contracts in this post. There may be other contingencies, like the sale of the buyers house for instance. These are all contingencies a buyer would need to release before a house could be listed as Sale Pending in the Iowa City area.
Of course there is an outside chance that after the home is listed as Sale Pending there is still legal work to be done and that something unforeseen will come up. This is not something buyers have any influence over. This is something the sellers are responsible for. When they list their home for sale in Iowa City it needs to have what is called “marketable title.” In short, they need to be in a position to sell the home and pay off all liens at closing. To show this is possible an attorney will prepare a title opinion before closing. Sometimes things do come up in the title opinion that need resolving before closing. It’s rare that something comes up that kills the deal. In the six years I’ve been in real estate I’ve only had this happen one time. (The seller was unable to close and sold his house about a year later as a short sale). In other words, it’s not exactly a regular occurrence to have deals fall apart after the financing and inspection contingencies have been released.
So there you have it. Viewing a home when it’s listed as Sale Pending will in all likelihood be a waste of your time. Now if a home is marked Contingent that’s a different story. There are a number of scenarios where it might be worth pursuing a home that is Contingent. If it still has outstanding contingencies it’s certainly not a done deal yet. Whether or not you want to do that will be dependent on a number of factors and something you should probably talk through with your Realtor.