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A pending sale means that someone has made an offer on the home and that offer has been accepted.  It does not mean that the loan has been closed or that the home is sold.  A home will remain in the pending process until all of the legal work has been completed and the loan closes.  It is common for people to get discouraged when shopping for a new home and they see that the home they were looking at is “pending sale.”  Don’t lose hope!  There are many reasons why a sale may not go through.  Some sellers will still accept offers while the home is pending just in case if the loan doesn’t work out.  It is important to know why a deal might fall through so that you don’t find yourself in that situation.  Here are some of the reasons the loan transaction might not work out.

 

Financial Reasons

There are several things that can happen from a financial stand point that could prevent a deal from going through.  Sometimes home buyers will take on a lot of credit or make a large bank account transfer during the mortgage process.  Both of these actions can cause the borrower to no longer qualify.  In fact, taking on any new debt during the transaction could affect eligibility.  If there is a situation in which a financial transaction makes it so the borrower no longer qualifies for the loan, the home will likely be placed back on the market.  It is important to consult with your loan officer before making any significant financial decisions during the loan process.

Issues with Title on the Property

Once the loan process has begun, a title company will review all of the title work on the property.  The title company may find that there is a lien on the property.  This means that the current owner has certain bills that have not been paid, or there are other legal issues with the owner or the property that are affecting their right to sell the home.  If the property is not cleared of these liens, the lender will not allow the transaction to go through.  Clerical errors on title work or public records, such as the deed, could also cause a hold up.

Purchase Contract Conditions

Every home buyer should have a home inspection done on the home before purchase.  An inspector will come out and look over all aspects of the home and the property to make sure everything is in good condition.  If there are any issues discovered, the buyer may add “subject to” conditions to the contract.  These means that if these conditions are not met, the buyer can legally back out of the contract, which would result in the pending status being removed.

 

It is not very common for a purchase contract to fall through for the above reasons, however, it is very common for people to back out of a contract for personal reasons.  A buyer may find another home that they like better or may simply decide that now is not the right time to buy.  Whatever the reason may be, “sale pending” does NOT mean sold!  Whether you are looking at a home that is sale pending, or you have made an offer on a home and are in the sale pending phase, it is good to know what could potentially cause the deal to fall through.  If you have any questions about any other details of the home buying process, or if you want to see how much you can qualify for, please contact one of our mortgage loan officers today!