Don't Short Change the Pending Sales Category!
The term “pending sales” refers to real estate that has had an offer accepted but has not yet made it to closing. The property is technically off the market, (no longer available to another buyer) but is in a state of limbo as the seller waits for the buyer to get their mortgage and finalize the transaction for closing. During this time, the actual sale price of the property is not divulged but is kept confidential until the closing takes place. So, if we don’t know the actual price, why are pending sales important?
For Buyers, following pending sales offers two valuable bits of information. First, the number of pending sales in any community is a great indicator of which communities are having success with home sales – right up to the minute. Too often, housing figures that are quoted in the media are outdated – last year, last quarter, etc. Pending sales have just happened. They are a great up to the minute revelation of the number of real estate sales taking place. Secondly, while the exact sales price of the pending properties is not known, you can see what the asking price was at the time an offer was accepted. This helps to give you a general sense of values in a particular community.
For Sellers, pending sales serve similar purposes. Considering the prices of pending properties will help a seller determine a marketing price for their own home. While sold properties in your area may have closed 6 months ago, weighing these values with the up to the minute pending sales prices will help achieve a more accurate pricing picture. In addition, pending sales are the indicator for what is called the “absorption rate” of homes similar to the one you are selling. The absorption rate is arrived at by comparing the number of homes like yours that were available for sale at any point in time, and determining how many sold in that time frame and how long it took them to sell. If there are twenty homes on the market like yours and only 2 have sold in the past year, your absorption rate is low and your property pricing should reflect this fact. Conversely, if there are 2 homes like yours on the market and 20 have sold in the past six months, your absorption rate is high and you may have an easier sale ahead.
Don’t short change the Pending Sales category! Receive weekly pending sales info on towns in the Greater Boston Area with the "Avenue 3 Month in Review". Sign up today, there is a lot to be learned from this market indicator!