If you are searching real estate on line (and who isn’t?) it is easy to be confused about the availability, or sales status, of properties, when you are focused on important details like price, location and pictures. It helps to be familiar with the terms.
After all you don’t want to get excited about a property if it’s status is “Pending.” “Contingent/Release” doesn’t mean that the property has been released back into the market.
If you are a seller evaluating the competition for your property when it goes on the market, it can be useful to see how properties are moving, so keeping an eye on alternative status’s (beyond active) can provide insight in to the velocity of the market for your type of home.
So let’s do a little primer.
( A word of caution: Be aware of the source of listing data on the site you are searching. If it is not a direct feed (IDX feed) from a Multiple Listings Service, the data (especially status) may not be accurate. Many sites such as the websites of print publications and other aggregators are not necessarily up to date.)
This means that the property is technically fully available, i.e. a purchase contract has not been “ratified” by an able buyer and a willing seller.
Further caution. When is an active listing not really active? Some short sales and foreclosure (REO) properties may have multiple offers on the table and not be accepting further offers, but the parties have not fully ratified the purchase agreement and bank addendum so the status is not showing as Contingent. This has been a source of friction between MLS’ and listing agents for these properties. It is a murky area because until the contracts are ratified, technically the property is active.
It is a good idea to ask your agent to check the agent confidential remarks to see if additional offers are being accepted. These days, with so few homes for sale, I generally check with the listing agent to determine availability for the properties my clients are most interested in.
CONTINGENT, CONTINUE TO SHOW
This status means that the buyer and seller have come to terms and ratified a purchase agreement, but that the buyer has made their offer subject to the removal of certain contingencies, which can include, but not be limited to:
Loan Contingency- Both the property and the buyer need to be fully approved qualify for a loan.
Appraisal Contingency- This optional contingency is added protection for a buyer in cases where the appraisal is not sufficient for the bank to approve the property at the agreed upon purchase price. (Note:technically all contingencies are optional, but I don’t advise buying a property with no contingencies. We do see that when the market is red-hot in certain markets in the Bay area but it is NOT a good idea.)
Buyer’s Investigation- This is also known as the Inspection Contingency and can cover any item the buyer deems relevant to satisfy themselves in depth about the property: it’s structural integrity, the neighborhood, etc. Generally inspections include termite, contractors, well & septic (if applicable), natural hazards, public records and databases, title report, etc. It also means if you want your great aunt Minnie to see the property and give her approval prior to your purchase, that is your right. You could have a feng shui expert look at the property, it is up to you as the buyer to satisfy yourself that the property is right for you. This is a big subject which we won’t cover in full here.
There are other contingencies such as the buyers right to review seller disclosures, preliminary title reports and property tax bills, etc.
All of the timeframes for these various contingencies are specified in the purchase agreement. Standard terms are 17 days in the California Association of Realtors (CAR) contract, but their existence and their length are completely negotiable. What you as a buyer submit in your offer depends on the deal strategy you and your realtor are employing. Timeframes can be extended indefinitely, as long as both parties are in agreement and the extensions are specified in writing.
Once the buyer is satisfied that all their investigations are complete, the loan and appraisal are fully approved by the lender, all systems become “Go” and the deal goes…..
This status is usually a shorter time period, but not always. Now it is just a matter of time, specified in the purchase offer, until the deal closes. Buyers need to sign loan documents, sellers need to sign their documents, the lender gathers their final “prior to funding” documents, documents are reviewed by the lender, insurance and other bills are presented to escrow, until all the pieces fall in place and the deal can be released to recording at the county. In Northern California, there is no formal closing event as their is in other parts of the country. Every area has their own customs. Once the deal is recorded, the property transfer is official and the property status becomes…..
SOLD That should be pretty self-explanatory. The agent remarks in the MLS should note the type of financing, any seller concessions and sometimes an atta boy to the buyer’s agent for doing a good job!
I’ll look at some of the other status types in the next few days. Please let me know if you have any questions,and thanks for stopping by!
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