If the house you're interested in has the real estate listing status "active/pending short sale," what does that mean? Unlike "active," "pending," or "sold," this status is a bit of a head-scratcher. Does "pending short sale" mean someone's offer has been accepted by the seller? Or does "active" mean the house is still up for grabs? Let’s break it down and clarify what this real estate term actually means for buyers, and whether it's even worth making an offer.
All about active/pending
"Active" means a property is for sale, and the seller is seeking offers. "Pending" means the property is still technically for sale, but someone has made an offer. The transaction is considered pending until the buyer actually closes escrow.
That’s all straightforward, but what does it mean when the listing says "active/pending"? It usually means the seller would like to get more offers, says Denise Shur, a Realtor® with 1:1 Realty in San Jose, CA.
A backup offer on a sale pending home is negotiated just like any other offer, with both parties agreeing on the price and terms. Then, if the primary offer falls through, the backup deal kicks in, saving the homeowner from having to start from scratch with another buyer.
“Savvy agents want backup offers in place," Shur says.
What is a short sale?A transaction is considered a short sale when the homeowners owe their lender more than the selling price, and the lender agrees to accept less than the full amount owed. The key here is that the bank has to agree, and the approval process can take weeks or even months.
What does 'active/pending short sale' mean?
So, if you put all three terms together, "active/pending short sale" means that a seller has accepted an offer on a short sale home, but is waiting for the bank to approve the deal. Sellers particularly like backup offers for short sales because the approval process takes so long and could end in rejection by the bank.
What to keep in mind if you do make an offer
So, should you even bother putting in a bid on an active/pending short sale? It depends on your circumstances, and your patience.
"Short sales can be a great way for a buyer to get a good house for less money. However, I would not suggest this type of property for anyone looking to move fast," says Jen Teague, a Realtor in Ellis County, TX.
And all that waiting isn't passive, says Rick Snow, a broker with Exit West Realty in El Paso, TX. The lenders—who are stuck paying for closing costs that a seller would typically cover—will often counter with their own demands, such as repairs or fees, that the buyer must pay.
Buyers who do make an offer should have their own backup plan, says Melanie Cameron, a broker with Coldwell Banker Sea Coast Realty in Wilmington, NC.
"Buyers often need to move within a specific time frame. It’s common for them to keep looking after making an offer on a short sale, in case something better comes up."
So if you see a property you really want marked “active/pending short sale,” don’t get your hopes up too high. It can’t hurt to put your best offer in and hope for the best, but be prepared to wait, be prepared for disappointment, and don't stop looking.
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