Have you ever had your eye on a home that you really liked and possibly wanted to buy, but suddenly it disappears from the listings? You call your real estate agent to find out that the home is under contract with a pending sale to someone else. The home is not sold yet, so is there anyway you can still buy it? The answer in most cases is no, but real estate transactions sometimes offer buyers another opportunity.
I’ll outline a few examples of ways that buyers can still possibly acquire the home. Please note, this list doesn’t cover every possible scenario, and I can only speak about examples I have seen in the state of Washington where I am licensed. Your local laws and practices may vary.
- Sale Pending – The home has an active purchase and sale contract that has been agreed upon by the buyer and seller. Normally these contracts do not allow a second buyer to “bump” the first buyer. There is not a great opportunity here, but you can submit a backup offer in case the first contract falls through. The most common reasons for a sale to fall through are buyer’s remorse, an unsatisfactory home inspection, or the inability of the buyer to secure a mortgage.
- Contingent Sale – The home has an active purchase and sale contract that has been agreed upon by the buyer and seller. However, that contract is contingent upon the buyer selling their current home. In our contracts, a contingent buyer can be “bumped” if another non-contingent buyer submits an acceptable offer. The contingent buyer has a chance to waive their contingency, but if their property hasn’t sold, this is an excellent chance for the second buyer to acquire the home.
- Short Sale/Pre-foreclosure – Short sales and pre-foreclosure properties are often sold with the condition that the agreement is “subject to bank approval”. The process varies, but generally sellers will accept one or more offers and then submit them to their mortgage company for approval. If the approval has not yet been obtained, the mortgage company will almost always be willing to entertain additional offers, since they could be more attractive. If you are a buyer, you can win out over the other buyer(s) if your bid is better and submitted before the review process. You can also be outbid in this process.
- Guardian Sale – Sometimes sellers are incapacitated and a court-appointed guardian is assigned to handle their financial affairs. The guardian may sell real estate, but the transaction likely requires court approval. In Washington, guardian laws allow for a second buyer to “bump” the original buyer within certain timelines if the second offer is sufficiently better than the first offer.
There are certainly other scenarios and examples, but the important point is that often none of these opportunities are apparent simply by looking at a pending listing online. If you still want the property, have your real estate agent contact the listing agent who will have more details about the pending sale. If you really want the house and don’t mind a bit of extra paperwork, it can be worthwhile to submit a backup offer or to attempt to bump the first buyer. Your agent will help you gauge whether it is worth your time and will also help you craft an appropriate offer in these situations. You won’t always succeed, but for the right home, this sort of diligence can sometimes payoff.
Here is a link to a video answering the same question. Can I buy a home that is pending?