What Does Pending Mean? 9 Reasons Home Sales Fall Through

We all know how much it hurts to get your hopes up, only to have your plans fail. It stings when it’s a canceled date, it’s disappointing when you don’t get a job, but it’s devastating when the pending sale on your dream home falls through.

But first, what does “pending sale” actually mean? If you’re house hunting and see a listing marked as “pending” or “under contract,” you might be wondering if you can still make an offer, how long the process takes, or whether the deal could still fall apart. (Spoiler: yes, it can.)

The average time from offer to close is 50 days, and a lot can happen in that month and a half. In fact, studies suggest that 5-10% of pending home sales don’t make it to closing. There are several reasons why a pending home sale might be canceled, including:

Some of these are preventable, but others are up to fate. While you can’t control all these factors, you can make sure you’re fully prepared to address your own responsibilities as a buyer or seller to prevent any mishaps.

What Is a Pending Sale? 

A “pending sale” (sometimes called “sale pending” or “under contract”) means that a seller has accepted an offer from a buyer and both parties have signed a purchase agreement. The home is essentially spoken for, but the sale hasn’t officially closed yet.

You might also hear terms like “under contract” (meaning the house sale’s contract is in process) or “closing period” (referring to the weeks between an offer and the finished sale). These all describe the same thing: the home is in that crucial in-between stage where paperwork is being processed, inspections are happening, and financing is being finalized.

How Long Can a House Be Pending?

The pending period typically lasts 30-50 days, though it can be shorter or longer depending on financing type, inspection results, and how quickly both parties complete their requirements. FHA and VA loans may take slightly longer than conventional financing due to additional requirements.

Can You Still Make an Offer on a Pending Home?

Technically, you can submit a backup offer on a pending home, but the seller isn’t obligated to consider it. Most sellers won’t entertain new offers once they’re under contract unless their current deal falls through. That said, it doesn’t hurt to express interest as about 5-10% of pending sales don’t close, so you could be next in line.

Pending vs Contingent vs Under Contract: What’s the Difference?

These terms are often used interchangeably, but there are subtle differences:

Contingent: The seller has accepted an offer, but the sale is contingent on certain conditions being met (like a home inspection, appraisal, or the buyer selling their current home). Contingent homes are less likely to close than pending homes because there are more potential deal-breakers remaining.

Pending: All major contingencies have been satisfied or waived. The home is in the final stages before closing, waiting on paperwork, final walkthroughs, and funds transfer. Pending homes are more likely to close than contingent ones.

Under Contract: This is an umbrella term that covers both contingent and pending homes. If a home is “under contract,” it simply means there’s a legally binding agreement between buyer and seller.

Active with Contingency: In some markets, you’ll see homes listed as “active” even though they’re under contract. This means the seller is still accepting backup offers while contingencies are being worked through.

This period allows for paperwork and for both the buyer and seller to get their ducks in a row.

Most contracts include contingencies, as in items that must be completed for the contract to remain valid and the sale to follow through.

Contingencies are meant to protect both the buyer and the seller. For example, a buyer could include a home inspection contingency, which allows them to exit the contract if an inspection finds major damage to the home. On the other hand, a seller might include a kick-out clause, which allows them to find a better buyer if the original one is waiting to sell their own home. While these contingencies are designed to help both parties, they can also cause a pending sale to fall through.

Common Reasons Pending Sales Don’t Cross the Finish Line

The buyer’s mortgage financing falls through

Before you think too seriously about buying a house, you should contact a lender and get pre-qualified or pre-approved for a mortgage. This will help you understand just how much house you can afford. Pre-approval requires a bit more information and effort, but it also carries more weight. In either case, your lender will provide you with a letter indicating they’re prepared to loan you the money.

However, neither pre-qualification or pre-approval is a guarantee of a loan. If you’re a buyer and your financial situation changes, like if you lose your job, acquire more debt, or your credit score changes, you may not be approved for your loan. Even if interest rates change, your loan qualifications may change, too. If there’s a financing contingency in your contract, both buyer and seller will be able to walk away without repercussions.

Even with pre-approval, financing can still fall through. According to industry data, financing issues are the #1 reason pending sales collapse, accounting for about 30-40% of failed deals. Interest rate increases during the pending period can affect a buyer’s debt-to-income ratio, potentially disqualifying them. This is why buyers should avoid any major financial changes like buying a car, switching jobs, or opening new credit cards between offer acceptance and closing.

If you’re a buyer worried about financing falling through, consider getting pre-approved for an FHA loan. FHA loans have more flexible credit requirements and allow for higher debt-to-income ratios than conventional loans, making them a solid option for borrowers with less-than-perfect credit.

If you think your loan fell through because of discrimination based on your race, religion, sex, marital status, use of public assistance, national origin, disability, or age, that’s illegal. You should file a report with the Consumer Financial Protection Bureau or the U.S. Department of Housing and Urban Development.

The home inspection turns up major damage.

Your dream home may look perfect, but you’d be surprised how many nasty surprises might be lurking under its exterior. That’s why most contracts have a home inspection contingency which protects the buyer if the inspection turns up extensive damage. If there’s major damage to address, like foundation issues or if the house needs a new roof, the buyer can ask the homeowner to make those repairs. As an alternative, the seller could offer the buyer the money to make the fix as a credit at the closing. If the homeowner refuses or if the damage is just too much for the buyer to bear, it can cause the pending sale to fall through.

A specific kind of damage to keep in mind is that caused by termites or carpenter ants. These pesky pests can cause serious damage to a home by eating its wooden elements, which is why most lenders actually require a termite inspection before they’ll approve the loan. If they find termite damage, that in itself could cause them to cancel the loan.

The appraisal is lower than the sale price.

The lender will appraise the home before approving the loan, which means they’ll evaluate the value of the property. This is determined by inspecting the home, as well as comparing it to similar houses. Your lender wants to make sure the house is worth at least what you’re paying for it so that if they have to repossess the house, they’ll be able to recoup their losses.

Sometimes when home prices are driven up by competition and even bidding wars the appraisal will come in below the price being offered for the home. When this happens, the bank or lender can decline the loan, or they may require the buyer to pay the difference. If the buyer can’t do so, the pending sale will fail. In this case, the buyer can use a financing contingency to walk away without losing their earnest money.

Low appraisals are especially common in hot markets where bidding wars drive prices above market value. The lender won’t loan more than the appraised value, so if your offer is $350,000 but the home only appraises for $330,000, you’ll need to come up with the $20,000 difference out of pocket or renegotiate with the seller.

The buyer can’t sell their old home.

Another common contingency is the home sale contingency. Typically, buyers who are already homeowners need to sell their existing home in order to get financing for their new home. Sometimes they find a home they love before they’ve sold their old place. In these cases, they may ask for a home sale contingency in the contract, which gives them 30–60 days to sell their existing home.

While this is great for buyers, it’s a risk for sellers because there’s basically no guarantee these buyers will purchase your home. If their existing home fails to sell in the allotted time, they can walk away from your house scot-free. If you’re a seller considering a contract with a home sale contingency, it might be helpful to research the average Days on Market in the area to estimate how quickly their home will sell.

There are issues with the title.

Before your lender will approve your loan, they’ll want to make sure the home’s title is squeaky clean. The lender will require that a title company research the property to ensure it’s in good shape and there are no outstanding liens (meaning the seller owes someone money, and the house is being held against that debt) or judgments (a similar situation in which a judge has ordered a debt be paid and the property is held until the debt is satisfied). A lien or judgment may show up on a house title if the owner hasn’t paid property taxes, for example, or if a contractor they used to work on the house is still owed money.

In doing research on the title, your lender also wants to make sure no one else has a right to the property. For example, if an heir or spouse is on the title, they’d need to sign off on the transfer, too. Even the Internal Revenue Service (IRS) or state could have a claim to the house if the owner hasn’t paid their taxes or owes the state for some other reason.

If a title search turns up any of these issues, sorting them out can be time-consuming. There has to be a clear title in order for the sale to proceed, and sometimes that just isn’t possible. Even if it is possible, often buyers will walk away from the sale rather than sort through title transfers or liens.

The home isn’t insurable.

In order to secure a home loan, you have to insure the home. So if the house is uninsurable, no loan. A home is uninsurable if it is uninhabitable, which usually means it’s got some serious damage or needs extensive repairs. If the prior owner made a major insurance claim on the house, because of flooding or black mold for example, insurance companies will see that history, and they may decide insuring it is too risky.

Whatever the reason, if the house you’re looking at is uninsurable, your lender won’t approve your loan. The only way to buy a house like this is to pay cash. And to be honest, if it’s uninsurable, you probably don’t want to buy it, anyway.

The buyer is inexperienced.

Buying a house is complicated, and there’s a huge learning curve for a first-time buyer. That also means there’s a lot more room for error. First-time home buyers may have trouble securing a mortgage or may not understand their budgets. (Hey, buyers, that’s why it’s so important to get pre-qualified or pre-approved for a loan before starting the shopping process!) First-time homebuyers’ mortgage contracts also just get scrutinized more than others because the bank wants to make sure they’re making a good investment.

If you’re a first-time buyer, be sure to do all your homework before putting in an offer on a home to make sure you’re fully prepared. If you’re a seller, be sure to review the contract closely to see what the financing contingency looks like. If the buyer is a new owner and they will be able to drop out of the pending sale easily, you might want to consider other offers instead.

There are details missing on the paperwork.

There are a lot of moving pieces in every home sale, and it takes a lot of effort by many parties for everything to come together. If anyone makes even a tiny mistake, it could delay the whole process. For example, the real estate attorney could miss the deadline or fail to deliver the proper documents. If the fault can be attributed to the buyer, they may have to pay the seller a fee for each day the closing is delayed. In some cases, the seller might not agree to the delays, and the sale will not continue.

The buyer or seller gets cold feet.

Buying or selling a home is a big decision, and sometimes it turns out to be the wrong one. Depending on the contingencies and timeframe, backing out of a sale after an offer has been accepted could be bad for either the buyer or the seller. During the contingency period, either party can walk away from the contract if there’s a valid reason outlined in the contract like if their financing falls through or the inspection turns up major damage.

However, if it’s past that period of time, or if there’s no reason for canceling the sale that can be connected to a contingency, that’s problematic. If a buyer walks away from the sale, they’ll lose their earnest money. That money is meant to credit the seller for the time lost when they could have been negotiating with another buyer. If a seller backs out, the buyer is legally afforded the right to collect damages. 

Frequently Asked Questions About Pending Home Sales

How often do pending home sales fall through?

Research suggests that approximately 5-10% of pending home sales don’t make it to closing. The rate varies by market conditions, financing type, and time of year. Sales are more likely to fall through during periods of rising interest rates or in highly competitive markets where buyers may overextend themselves.

At what point do most house sales fall through?

Most deals that fall apart do so within the first 30-45 days of the pending period. This is when inspections are completed, appraisals come back, and financing is finalized. Very few sales collapse in the final week before closing, though it can happen if there are last-minute financing issues.

How often do buyers back out at closing?

Buyers backing out at closing is relatively rare, happening in about 2-4% of transactions. By this stage, most contingencies have been satisfied and both parties have invested significant time and money. However, it can happen if the buyer loses their job, experiences a major life change, or discovers undisclosed problems during the final walkthrough.

What percentage of FHA loans fall through?

FHA loans have a slightly higher fall-through rate than conventional loans. This is partly because FHA buyers often have lower credit scores and smaller down payments, making them more vulnerable to financing issues. Additionally, FHA appraisals are more stringent and may reveal problems that cause deals to collapse. That said, working with an experienced lender who specializes in FHA loans can significantly reduce these risks.

Can a seller back out of a pending sale?

Technically yes, but it’s risky for the seller. If a seller backs out without a valid reason outlined in the contract (like a buyer missing deadlines or failing to meet contingencies), the buyer can sue for specific performance or damages. Most sellers who want out will try to find a legitimate contract-based reason rather than simply getting cold feet.

What does “pending—continue to show” mean?

Some listings show “pending” but are still available for showings. This usually means the seller is accepting backup offers while the current buyer works through contingencies. It’s less common but can happen when the seller is uncertain about the buyer’s ability to close or wants to keep their options open.

How can I prevent my pending sale from falling through as a buyer?

The best prevention strategies include:

• Getting pre-approved (not just pre-qualified) for a mortgage before making an offer
• Avoiding major financial changes during the pending period (don’t buy a car, switch jobs, or take on new debt)
• Scheduling inspections promptly and negotiating repairs in good faith
• Staying in close contact with your lender and real estate agent
• Being prepared with backup financing options if rates change

If you’re concerned about qualifying for a mortgage, consider working with a lender who specializes in various loan types. At Dash Home Loans, we can help match you with the right financing option for your situation, whether that’s an FHA loan, conventional loan, or another program.

How can I prevent my pending sale from falling through as a seller?

Sellers can protect themselves by:

• Having a pre-listing inspection done to identify problems early
• Choosing qualified buyers with strong pre-approvals
• Being reasonable about repair negotiations
• Ensuring clear title before listing
• Responding quickly to buyer requests and staying on top of deadlines

Ensuring Your Home Sale Crosses the Finish Line

One thing we know: Buying and selling a home is complicated. As the buyer or seller, you should do everything possible to make sure the process goes smoothly, like getting pre-approved for your loan if you’re a buyer, or addressing any major repairs if you’re a seller.

We know that the mortgage and buying process sucks, which is why we at Dash Home Loans work to make it easier. We’ll be with you every step of the way to ensure you’ve got everything lined up and the buying process goes smoothly. 

Opinions expressed are solely my own and do not express the views of my employer.

*Pre-approvals are given to clients who have met qualifying approval criteria, and specific loan requirements, at the time of applications. Results may vary.