It is the second best feeling a home owner can experience: accepting an offer for their home and opening up escrow. The best feeling, of course, is the day the home actually sells. It has become a custom to publicly acknowledge this milestone—opening escrow—by placing a “Sale Pending” or “In Escrow” sign on top of the For Sale sign in the home owner’s front yard. But is that really a good idea? As things turn out, no.
The problem is that until a home actually sells, it may not. It is entirely possible for a home to “fall out” of escrow. It happens all the time—even on the last day, just before the escrow closes.
Suppose the person offering to buy your home is killed in a car crash the last day of escrow and the bank lending the money finds out about it. I am pretty sure your home is going to fall out of escrow and you will start the home selling process all over again. What insurance can you get against something like this happening? None, but there is something you can do just in case it does happen. What you can do is to continue to collect the names and numbers of buyers interested in your home. In that way, should your home fall out of escrow, for whatever reason, you will have a list of names to call immediately and quickly restart the home selling process. The problems is that “Sale Pending” signs scare away the next round of buyers.
If a buyer drives by a For Sale sign and they like the home, the chances are they are going to call the number on the sign. When you or your agent answers the phone, you can tell the prospective buyer that the home is in escrow, but you will take their name and number in case anything changes. On the other hand, if that same buyer sees a “Sale Pending” sign on top of the For Sale sign, there is a pretty good chance they will just keep driving, and there goes your backup plan. Why would you do something that offers no benefit and may be a detriment?
When you are selling your home and it finally goes into escrow, resist the urge to do what every other home sellers does and forget about the Sale Pending sign. There will be plenty of opportunity to celebrate once your home is no longer yours. The only sign you should care about is the buyer’s signature on the contract.