Patience is the key with any purchase especially short sales. Now the answer, Contingent means an offer was submitted. But honestly many times the first buyer who wrote the offer to put it contingent has moved on (not all cases). A statistic I’ve heard, it’s the 3rd buyer who typically closes the short sale. I suggest you have a Realtor willing to call on homes that fit your parameters. As far as writing an offer under asking price, the listing agent has determined listing price not the lender. The lenders do what’s called a BPO= Broker Price Opinion meaning they verify current value from an independent 3rd agent or appraiser. Typically the lenders will allow about a 5% variance.

Brian Frank
Lyon Real Estate
916-402-4697

The previous answers give you a good feel of what an active short contingent status means on a home, but it really is not cut and dry. Realtors have no defined procedure on receiving offers after the first one is submitted to the seller's lender for approval. They are required to follow the instructions of the seller but in most cases, the seller doesn't have any preference except to make this as simple for him/her as possible. As they aren't receiving any proceeds, they just don't care.

Reading the agent confidential remarks will give insight into the way the realtor is handling it while in short sale contingent status. Some agents will no longer allow any showings, some will. Some will submit all offers (REALLY bad idea as the lenders don't want to see them) but most will work with the current offer submitted and hold others for backup.

I tell my buyers that if the home has been short sale contingent for more than 60 days, and they are allowing showings, then we could consider putting in a backup offer, but don't put all your hopes on getting it.

There are so many unknowns on short sales, that you can't bet all your eggs on one home. That's why they traditionally sell a little less on the market than REO homes....because REO homes are immediately available. And short sales may never happen, or they may, you just don't know.

Hi Pelin

There are three popular statuses that you want to be familiar with:

Active: This could be either a traditional listing or REO, but either way, is NOT a short sale

Active Short Sale: This means the seller is experiencing a financial hardship and must sell but the current market value is less than what is owed on the property and they must request that the bank forgive the difference to allow the sale.

Active Short Contingent: This means the bank has had an offer submitted for approval as stated above. This process can take from as little as 30 days to as much as 6 to eight months, with an average being 3 months.

You may want to educate yourself on the short sale process by speaking with a short sale specialist prior to submitting an offer. There are many agents doing short sales without the knowledge of how to successfully complete them and this causes much confusion in the market.

As a designated Certified Distressed Property Expert (CDPE), we are moving towards a more streamlined and consistent process as it pertains to short sale contingencies. Look for the CDPE designation in your property searches, and make sure your agent is also CDPE certified or has extensive knowledge in the area of short sles before you begin your search.

My best to you!

To some agents and buyers, Active Short Contingent means you can submit an offer and the agent will send your offer, if it's better than all the other offers, to the bank, which could then very possibly be ignored by the bank, resulting in you waiting for 5 months for an answer that is never going to come.

If you're looking at one of my short sale listings in Active Short Contingent status, it means you are better off putting in an offer on something else because that listing is not available to you.

If buyers insist on writing an offer anyway, I will send it to the seller, but it will not go to the bank nor be in the running. It will sit in a file, alongside the other 20 offers we've received.

If the buyer whose offer was accepted by the seller decides for some reason to cancel, I will call the next highest offer in line and put the home back on the market into active short status. Most of my short sales sell way over list price because those buyer's agents pulled the comparable sales and realized the home was priced under market.

Sometimes, a short sale seller might accept a back-up offer, especially if it's very early in the process. This is a formal procedure requiring a contract that specifically states the offer is in #1 back-up position. On those, the seller signs instructions authorizing the listing agent to either send or not send that offer to the bank. If the back-up offer is much better than the accepted offer, the back-up, according to the Short Sale Addendum, could knock the first offer off the table.

However, for the most part, you're probably wasting your time if you try to pursue an Active Short Contingent.

I even go so far as to put "seller requests no more showings" in MLS on some of my Active Short Contingent status listings, yet agents still try to show those listings. Heck, they even show my pending listings. It's getting so I have to hide the lockbox from them.

Hi Pelin,

Active Short Contingent means that there is already an offer on the property that has been accepted by the sellers and have been submitted to the bank holding their mortgage for approval on the short sale amount.
There is not a cut and dry percentage less that you can offer. You would need to have your agent look for comparable sold properties to see what those are selling for and then base your offer price on what the market value of the home is. From there you could offer less.

Homes that show a status of Active Short Sale are still available. You can possibly still put a back up offer on a home with a contingent status, but you'd need to check with the listing agent first to see if they are accepting back up offers. If the buyer who has their offer in with the bank for approval backs out, back up offers would be looked at next.

Hope this helps.

DeeDee

"ASC" means 1. It is a short sale (owner owes more than house value) 2. An offer has been accepted by the seller. 3. The sale is being held up until one or more banks approve of the loss they will have to write off of their books.

Because these bank approvals can take many months, or maybe never, many buyers choose to back out of their contracts out of frustration. The ASC listing means the listing agent is actively seeking back up buyers in case the first buyer bails out.