What Does “Pending” Status Mean In The Market Of Real Estate? And What Its Different Options Are
Scanning the market for possibilities of purchasing a house or another type of property, you might have spotted that some objects are marked as “pending” or “contingent”. If you’re interested, what does pending mean when buying a house, this article is for you. Below, we’re considering both “pending” and “contingent” statuses of objects.
What is pending in real estate?
When you see the ‘pending’ status in some object on the list, it means that the potential buyer and seller have agreed to make the sale-purchase operation. To verify that, they have concluded a binding contract. From now on, several pre-sale actions must be undertaken within set time frames to make the operation happen. These usually are:
- Undergoing inspection by a professional inspector (to find out any potential flaws in the property, which a non-professional buyer might have missed during the initial surface-level visual inspection of an object). Usually, there are two possible outcomes of this: if any serious flaw is found, it can be either eliminated by the owner for free to make the contract stay in full power or a seller might step out of the contract without financial losses.
- Financing. Although the biggest part of buyers receives pre-agreement from their bank for a particular loan amount (to know what they’re capped to during the search for property to buy), each particular deal has to be verified and approved finally, with a full range of documents from a buyer, seller, and property. Some percentage of deals will eventually not be bank-approved for a number of reasons.
- Appraisal. In most markets, every property that’s being bought needs to be appraised by a licensed appraiser. This may concern taxation issues as well as bank financing – as no bank would like to make a bad deal, giving more money than an object is actually worth. The appraisal may turn down a part of deals.
- Title. Some objects may have problems with a title – it might be not completely clear or free. For instance, an object could be loan collateral, under legal sues, or potentially disputed by some yet unknown heirs. It could also be a part of some illegal deeds or simply records for its ownership might be erroneous. While some of the mentioned can be corrected, a fair share of them is rather not.
All the above are usually named “contingent”, as these are conditions that must be met to make a deal successfully closed. If one or several of them fail, the deal won’t happen.
According to open data sources, only up to 4% of all “pending” deals end up with refusal for one of the named reasons, as well as because of cold feet. And here is where you, being interested in this property, might step in.
Various instances of pending meaning in real estate
After an object starts to be “pending” – undergoing all the mentioned above steps – it might still stay in the market, taking backup offers. These are taken specifically for the case if something goes wrong – so another buyer steps in. Surely, you might not be interested in an object if there are legal issues connected. But as for the rest – if the previous guy steps out, you could step in. Here is where you might be interested what does sale pending mean in real estate that has an additional status near to ‘pending’, like one of those:
- Taking backups
- Continuing to show
- Do not show
- Over N months.
Each of the mentioned is specific, although they are very close by meaning to one another. ‘Taking backups’ means exactly what you’re interested in – if something falls apart, you can step in. Remember that in the overwhelming majority of cases, a backup offer is also a binding contractual obligation, just like the initial one that leads to “pending”.
“Continuing to show” means that a contract might not have been signed yet (after the discussions are made), so there is a small time gap when the object is still available to be viewed and even backup offers accepted.
“Do not show” means that an object is no longer shown because of a signed contract, local legislation, or general housing practice in the area/country that forbids this (as well as taking backups).
“Over N months” means that an object is being “pending” over the N number of months, so when this term runs over (and the object is not finally bought), it’s put back to the market.
Basically, all but “Do not show” allow doing backup offers. If you’re lucky enough and the offer passes to you, you’ll have to go through the same actions indicated in the previous chapter to make it yours.
“Pending” is usually a no-go status for new offers (but backup ones). But since the chances that a real estate object will be freed and so you can step in are low, we do not recommend you to count on that status too much. So, the best solution? Simply skip it and get to the next offer on the list.
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More about DGY
DGY is a real estate investment and property management company. Our experts have an impressive experience in turning businessmen into smart real estate investors. We collect limitless opportunities throughout the world’s best real estate markets and help our clients implement the best deals. We take care of all due diligence and customize documentation while your income grows. We also provide you with property management services so you can forget about the tiresome maintenance of several objects and entrust this process to professionals.
Investment advice and recommendations
DGY is an investment company that takes care of every client and helps them become successful investors. With the help of an investment experience and a well-thought plan, we will help you examine the market, choose a strategy specifically for you or your business, and calculate future costs to start making money with real estate investment.
In order to invest in real estate, you should consider how you will run your management in Ukraine. DGY will help you eliminate all possible pitfalls at an early stage as a personal project manager will be assigned to your case. They will assist you in choosing the project according to all required objectives.
DGY Investments takes care not only of purchasing property but also renovating an existing one. With the help of a thorough plan and estimating, we will thoroughly prepare a property for sale. Our professionals evaluate an investment property and create a strategy that includes the costs for renovation, possible taxes, fluctuations on the market, etc. Therefore, our clients are able to resell the renovated properties in Ukraine with more than 15-20% profit from the initial price.
Before our clients decide to deal with real estate investing, they consult with our experts concerning details such as the necessary documents needed to purchase a property and successfully run all the processes connected to it.
Therefore, if you are eager to invest in Ukraine, it’s essential to have all the paperwork done correctly, and that’s the moment when our team of experts takes care of this step. DGY Investments helps investors buy real estate property, manage the paperwork, start preparing relevant documents for purchasing realty in Ukraine, and close the deal successfully.
Real estate investment opportunities in Ukraine
When an investor decides to invest in real estate in Ukraine, the most affordable way to attain stable passive income is through buying residential real estate. Investors can expect to receive a regular monthly payment from their tenants at a fixed monthly amount, unaffected by inflation or other unforeseen circumstances. The amount of rental income will vary depending on the size, type of property and location. For example, buying an apartment in Ukraine’s capital Kyiv is beneficial to investors due to offering a large working population, central location and affordable prices. Hence, the minimum price of renting a decent one-bedroom apartment in Shevchenkivskyi District will be around $1000 per month in 2021, followed by Pecherskyi District with a cost of $850 per month. Besides, investing in real estate in Ukraine annually brings clever investors up to 15% of yield, attracting many business people every year.
Properties for investments in Ukraine
Ukraine has a giant sector for real estate investing. Businessmen who come there all over the world often choose between investing in residential and commercial properties. The main advantage of buying property in Ukraine is the affordability of prices on the houses and apartments. For instance, if you invest in real estate in a historical district, a luxurious apartment will cost you around $85k only.
How to invest in Ukrainian Real Estate
In order to invest in Ukrainian real estate, you should take into account a list of crucial factors. The first one is to choose what kind of realty you are going to invest in: residential or commercial. It is vital as it should comply with Ukrainian real estate law. The second tip is to identify the purpose of purchase in order to make a strategy for the property. For instance, you may purchase the property for your own use or buy it for lease. The next step is to calculate the taxes and what kinds of taxes are payable during the purchase, owning, or selling. Also, to invest in real estate properly, you should keep in mind currency control rules in Ukraine to sell a property and get a higher profit.