Bottom line: Under Contract means almost SOLD. No need to email us and say "Is it still available? Can I see it?" It is not available for showings. It has a ratified contract on it with a serious buyer and closing might be days away. Favorite the home to sign up for an alert to be notified if it goes back to active.There are three stages of Under Contract on the MRIS MLS system. At FranklyMLS.com we show all three.
In 22201 right now there are 55 homes for sale under some sort of "Under Contract".
- 4 are: Under Contract/KO (Kickout) (These are pretty rare, 10%)
- 33 are: Under Contract/NoKO (No Kickout) (These are the most common at 60%)
- 18 are just plain: "Under Contract" about 30%
Under Contract/KO (w/Kickout)
This means that the home for sale has a contract that has been signed by the buyer and seller. However there is some terms in it that make it a "KICKOUT."
For example, if there is a home sale contingency, the seller is effectively saying in the kickout: "Ok, you can keep in that annoying home sale contingency, but if we get another offer, we will give you 3 days to 'sh*t or get off the pot.' " So when the other offer comes in, the buyer has to decide if they want to take on the risk of not selling their home, or if they want to let the seller sell to somebody else.
The downside for the seller is when it hits this stage, it gets dropped from many MLS sites and agents and buyers stay clear of it. Which is a shame.
This type of contract is only for about 10% of the homes for sale. If you have a GREAT agent, they should be looking for these as well. They are prime candidates. Why? The buyer has already been beaten down on the price (which is not posted publicly) and now all you need to do is come in with better terms (read my blog on terms terms terms). Nothing is guaranteed, but you have a shot.
Under Contract No/KO (No Kickout)
This is the most common Contract type. It doesn't have a particular term in it that will allow a buyer to easily get kicked out. However there are still some contingencies such as a Home Inspection or HOA Docs or an appraisal contingency. So a home buyer can put in a back up offer on these. Many agents will not because they think it is a waste of time, but you can still do it. The best approach is to make an offer with strong terms (and maybe a tad higher, if you can find out the other offer amount) and make it clear to the seller that if the buyer so much as sneezes or asks for anything unreasonable, you will be there and close quickly and not be a pain in the neck. Then you might have a shot.
Note that you can pull a back up offer at anytime before it becomes the prime offer. Ie if you plan to offer elsewhere.
Just: "Under Contract" Regular
I added the word "regular." It is actually just listed on the MRIS system as "Contract."
Some agents are lazy and skip the first two steps and put it in like this. Why? It takes 1 more step to enter into the MRIS system when it has gone from one stage to another stage and they can get fined by the MRIS if they forget to update it.
Listing Agent tip: Never ever list it as just "Under Contract- Regular" Why? The MRIS system is whacked and it shows other potential buyer agents who the listed buyer agent is! Who cares? Why in the world would you want to tell the world WHO the buyer is, before you close? This is private information and MRIS should change their policy on displaying this (only on the back end).
UPDATE 10-25-2012, this post conflicts with my post on How and when to write a back up offerhttp://blog.franklyrealty.com/2012/10/backupcontract.html. So check that out too if you are die hard serious about a particular home.
Written by Frank