October 9, 2014
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Twice, during the past week, two of our Listing Clients have received Offers on their homes for sale in the Birmingham area that depended on the Buyers being able to sell their homes first.
One of the Buyers has had their home on the market for quite some time, with no luck at getting it sold. The other Buyer didn’t have their home listed for sale yet. In both cases, our Sellers turned the Offers down. While we don’t want to see sales lost, we think our Sellers made the right decision in both cases.
A lot of times, Buyers submit Offers with two conditions: That the property passes an Inspection, and that the Buyer is able to obtain financing.
The sign may say Under Contract, but wise Sellers know that having a Contract in place does not always mean sitting at the closing table.
In earlier years, when a home went Under Contract with these conditions, a note to this effect was added to the home’s Active Listing on the Greater Alabama MLS. That way, a Buyer’s Agent would know beforehand, and could do some investigating, before deciding whether to recommend that the Client look at the home.
Sometimes, however, information about a Contract being in place was not included with the Listing. With no mention of this on MLS, Buyer’s Agents sometimes wound up showing homes thought to be still available to their Clients, only to learn later that the homes were already Under Contract.
This led to conversations (about as popular as the proverbial lead balloon) where Buyers had to be told, “Sorry, this home you’ve just spent time looking at and fallen in love with is already taken.”
The ensuing multitude of complaints led GAMLS to change the rules a couple of years back. Now, when a home goes Under Contract with a Contingency involved, the home’s status must be switched to a category called Contingent. When the Contingencies are removed, the status must then be changed again, this time, to Pending.
But not all Contingencies are created equal.
Some conditions, such as getting a home sold that’s been on the market a long time with no Offers—or is maybe not even on the market at all—can be a bigger obstacle to overcome than, say, a listed home in good condition passing Inspection, or a Buyer with good credit getting approved for a loan.
But, as far as the MLS is concerned, a Contingency is a Contingency.
So, the home that’s in sparkling nice condition and prime to sell must be moved from Active to Contingent status if the Seller takes an Offer with any contingencies that are part of the Contract.
Ever since the Contingent rule took effect, I’ve heard complaints that properties listed as Contingent are essentially considered off the market, even though, in some cases, another Buyer could ‘swoop in’ and still get the home.
The rule change forces Buyer’s Agents to look more closely at homes listed as Contingent, to determine how feasible it might be to submit a successful Offer on behalf of their Buyer Client. Some Buyer’s Agents do this. Some don’t, instead, viewing only Active Listings when looking for homes for their Client.
Knowing that their homes will have to seemingly ‘disappear’ from Active Listings, many Sellers are hesitant to take Offers with all but contingencies traditionally considered lower in risk (such as Inspection and Financing). This is because Sellers know their homes will be ‘off the radar’ — that is, far less visible to folks looking to buy.
Keep in mind that the Contingent period could last several weeks. Maybe a month. Maybe even several months. For this reason, Agents, trying to provide due diligence in serving their Client’s best interests, sometimes recommend that their Sellers not accept certain types of Contingent Offers. This won’t make a Buyer happy, but it probably lessens the chance of a Seller’s home staying less than fully visible to Buyers while waiting for a Contingency to be lifted, only to have the sale fall apart, leaving the Seller having to start all over again.
Getting your home sold can be easy or challenging, depending in part on the Contingencies involved in the agreement to sell.
As Listing Agents, we have to look at Offers we receive for our Clients’ properties with more scrutiny than ever. This is true especially if Contingencies are involved.
Contingencies, though usually inevitable in real estate sales, can pose a dilemma for everyone involved.
Are we talking, Contingent on sale of the Buyer’s home? Is the Buyer’s home Under Contract? Yes? No? The answer can make a big difference in how a Seller decides to respond.
Are we talking, Contingent on financing? Is the Buyer represented by a Lender the Seller’s Agent knows and considers reliable? Or is the Lender someone the Seller’s Agent has never worked with?
For whatever the reason, when it comes to whether to accept a Contingent Offer and agree to take their home off Active status (and ‘off the radar’) for some period of time, our Sellers look to us for answers to questions like these.
As a Buyer’s Agent, it would be easy to immediately strike a home marked as Contingent off the list of properties for our Buyer to consider. But what if the Contingency involved has a smaller chance of being removed, such as a Buyer’s home that hasn’t received an Offer yet? What if it’s the perfect place, and my Buyer could actually get it, even though it’s listed as Contingent?
Is the current Contingent status rule serving the Client’s best interests?
What if certain information about a Contingent Contract being in place was required to be entered with the Listing on MLS, but without changing the status from Active, similar to before the current rule took effect?
Who would be harmed?
Should we stick with what we have now?
Or, is there a better way to be serving our Clients?
—David Black
David Black is a member of the Greater Alabama MLS Governance Committee. The views expressed do not necessarily represent those of GAMLS or Keller Williams Realty.
Tags:
birmingham,
colleen black,
contingent,
david black,
greater alabama mls,
homes for sale,
keller williams realty metro south,
offer,
realtor
October 9, 2014 | No Comments Yet
Twice, during the past week, two of our Listing Clients have received Offers on their homes for sale in the Birmingham area that depended on the Buyers being able to sell their homes first.
One of the Buyers has had their home on the market for quite some time, with no luck at getting it sold. The other Buyer didn’t have their home listed for sale yet. In both cases, our Sellers turned the Offers down. While we don’t want to see sales lost, we think our Sellers made the right decision in both cases.
A lot of times, Buyers submit Offers with two conditions: That the property passes an Inspection, and that the Buyer is able to obtain financing.
The sign may say Under Contract, but wise Sellers know that having a Contract in place does not always mean sitting at the closing table.
In earlier years, when a home went Under Contract with these conditions, a note to this effect was added to the home’s Active Listing on the Greater Alabama MLS. That way, a Buyer’s Agent would know beforehand, and could do some investigating, before deciding whether to recommend that the Client look at the home.
Sometimes, however, information about a Contract being in place was not included with the Listing. With no mention of this on MLS, Buyer’s Agents sometimes wound up showing homes thought to be still available to their Clients, only to learn later that the homes were already Under Contract.
This led to conversations (about as popular as the proverbial lead balloon) where Buyers had to be told, “Sorry, this home you’ve just spent time looking at and fallen in love with is already taken.”
The ensuing multitude of complaints led GAMLS to change the rules a couple of years back. Now, when a home goes Under Contract with a Contingency involved, the home’s status must be switched to a category called Contingent. When the Contingencies are removed, the status must then be changed again, this time, to Pending.
But not all Contingencies are created equal.
Some conditions, such as getting a home sold that’s been on the market a long time with no Offers—or is maybe not even on the market at all—can be a bigger obstacle to overcome than, say, a listed home in good condition passing Inspection, or a Buyer with good credit getting approved for a loan.
But, as far as the MLS is concerned, a Contingency is a Contingency.
So, the home that’s in sparkling nice condition and prime to sell must be moved from Active to Contingent status if the Seller takes an Offer with any contingencies that are part of the Contract.
Ever since the Contingent rule took effect, I’ve heard complaints that properties listed as Contingent are essentially considered off the market, even though, in some cases, another Buyer could ‘swoop in’ and still get the home.
The rule change forces Buyer’s Agents to look more closely at homes listed as Contingent, to determine how feasible it might be to submit a successful Offer on behalf of their Buyer Client. Some Buyer’s Agents do this. Some don’t, instead, viewing only Active Listings when looking for homes for their Client.
Knowing that their homes will have to seemingly ‘disappear’ from Active Listings, many Sellers are hesitant to take Offers with all but contingencies traditionally considered lower in risk (such as Inspection and Financing). This is because Sellers know their homes will be ‘off the radar’ — that is, far less visible to folks looking to buy.
Keep in mind that the Contingent period could last several weeks. Maybe a month. Maybe even several months. For this reason, Agents, trying to provide due diligence in serving their Client’s best interests, sometimes recommend that their Sellers not accept certain types of Contingent Offers. This won’t make a Buyer happy, but it probably lessens the chance of a Seller’s home staying less than fully visible to Buyers while waiting for a Contingency to be lifted, only to have the sale fall apart, leaving the Seller having to start all over again.
Getting your home sold can be easy or challenging, depending in part on the Contingencies involved in the agreement to sell.
As Listing Agents, we have to look at Offers we receive for our Clients’ properties with more scrutiny than ever. This is true especially if Contingencies are involved.
Contingencies, though usually inevitable in real estate sales, can pose a dilemma for everyone involved.
Are we talking, Contingent on sale of the Buyer’s home? Is the Buyer’s home Under Contract? Yes? No? The answer can make a big difference in how a Seller decides to respond.
Are we talking, Contingent on financing? Is the Buyer represented by a Lender the Seller’s Agent knows and considers reliable? Or is the Lender someone the Seller’s Agent has never worked with?
For whatever the reason, when it comes to whether to accept a Contingent Offer and agree to take their home off Active status (and ‘off the radar’) for some period of time, our Sellers look to us for answers to questions like these.
As a Buyer’s Agent, it would be easy to immediately strike a home marked as Contingent off the list of properties for our Buyer to consider. But what if the Contingency involved has a smaller chance of being removed, such as a Buyer’s home that hasn’t received an Offer yet? What if it’s the perfect place, and my Buyer could actually get it, even though it’s listed as Contingent?
Is the current Contingent status rule serving the Client’s best interests?
What if certain information about a Contingent Contract being in place was required to be entered with the Listing on MLS, but without changing the status from Active, similar to before the current rule took effect?
Who would be harmed?
Should we stick with what we have now?
Or, is there a better way to be serving our Clients?
—David Black
Tags: birmingham, colleen black, contingent, david black, greater alabama mls, homes for sale, keller williams realty metro south, offer, realtorDavid Black is a member of the Greater Alabama MLS Governance Committee. The views expressed do not necessarily represent those of GAMLS or Keller Williams Realty.