Home Buying in Ashburn>Question Details

Lanna, Home Buyer in Maryland

Can someone give me some details about CNTG/NO KO and CNTG/KO. Do you still put offers on houses that have?

Asked by Lanna, Maryland Wed Mar 26, 2008

this status? Will they accept another offer while they are waiting for finanaces, etc to go through?

On another note, we are primarily looking in the Ashburn area for foreclosures. We have found several that we like and would have potential put offers on. The problem is...our real estate agent told us to wait and get fully approved from the bank before making any moves. While I understand that....we have lost about 3 houses to other people while we were waiting. We were at one time working with an agent in MD and she mentioned something like: if you see a house you like...I will call the other agent right now and tell them we are interested. I am just wonndering if that would have helped us in VA? Should our new agent be doing the same thing? I am really tired of finally finding houses to only find out the next day or two that it has offer or the CNTG/KO or NO KO on it.

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We have already been pre-approved by a bank. Our realtor is now telling us that he doesn't want us to put an offer in until we are fully approved....beyond just the pre-approval. Does that still sound right?
0 votes Thank Flag Link Wed Mar 26, 2008
When you are looking at foreclosures, it is imperative that you be well approved prior to submitting an offer. In my opinion, it is imperative with the new 2008 contracts to be approved prior to looking at homes. This protects you and your earnest money in addition to making your offer stronger because you are well qualified. Plus this lets you decide how much home you want to afford to remain comfortable each month after making the payment. It should not be taking so much time to get approved conditioned upon a home appraising. A great lender can close a loan in a week or two so you should be able to get approved within a short period of time granted you are providing all the documentation needed for your approval.

I understand you are anxious to take advantage of this fabulous buyers market. It sounds to me like you have a great agent looking our for your interest...not wanting you to be placed in a bad situation.

A Contingency with a Kickout (CK) I would bring an offer too because the contract is contingent upon the buyer named within the contract finding a buyer for their home. In this market, there is a good chance you would kick them out. A CO is usually not worth the time. With bank owned properties, there is always room for back up contracts as so much can happen. The only negative is that bank owned properties and short sale properties require a lot of patience because the banks are on banking hours and they are non-emotional about the process...it is all about the dollars. Please do not forget that a non-foreclosure can also be a great deal. Focus on your needs and wants to find a house you want to call home then make your offer.
Web Reference: http://www.HomesByLorie.com
0 votes Thank Flag Link Wed Mar 26, 2008
Dear Lanna,
It is so much better to be qualified before you head out on the home search. That way when you do find a home that you feel is it, you know that it is in your budget and you can proceed with making a offer. In my experience on foreclosures the institution requires that proof up front and they will not consider a contingency. Your agent will have a better chance on getting you the best deal. A Contg/KO is when a buyer has put a contract on a property subject to their property else where closing. If another offer comes in then they have 24 or 48 to decide to remove the contg. and make it a firm deal. If they can not, then their contract is terminated and they sellers will work the second offer. A contg with No KO could be from a number of things, example: the Seller having agreed to do something to the property or the buyer applying an additional earnest money payment by a certain date. The examples are endless and your agent should be able to explain this to you so that you really understand it.
The one question I always ask when a agent calls me and says My cleints love your listing at so and so. I think they will be making an offer. I alway reply, Have they been approved and what lender are they working with. If the answer is, oh we have not done that yet. Most of the time I never hear back from them because they were looking out of their price range. Good Luck and I hope you find and secure the home of your dreams.
Peggy Hatley
0 votes Thank Flag Link Wed Mar 26, 2008
Lanna,

Due to the large inventory it's usually not worth making offers on contingent contracts. With CNTG/KO, you might have a chance to bump the other buyer, but you're a bit at a disadvantage since the seller already has an "egg in hand" (as opposed to a bird).

As for your agent, I would say they are giving you GREAT advice. With our new Georgia contracts you could be putting yourself in harms way by making offers on properties that you might be able to actually afford. In addition, your approval letter will give you additional leverage and prove that you are a REAL buyer.

Good Luck,

Joshua from Gwinnett County
0 votes Thank Flag Link Wed Mar 26, 2008
Joshua Jarvis, Real Estate Pro in Duluth, GA
MVP'08
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