And I would never accept the offer with your "under agreement after the offer is accepted" contingency. Taking a property off the market, then putting it back on will directly affect the eventual sales price because it's different from the norm, it becomes "tainted", people don't look at it the same because "something must be wrong with it"
This is just a good indication that the sellers agent is smart. They are trying to maintain negotiating leverage in case you try to renegotiate after the home inspection. They want to make sure you are serious about buying the property before they take it off the marrket.
It sounds like you have an OFFER TO PURCHASE done, MLS requires it's under agreement after the P&S.
They are not doing anything I wouldn't do....
No offense to out of staters, but different states have different laws and customs.
Here in Massachusetts, the OFFER TO PURCHASE certaintly is a contract, however it is a contract with contingincies, I GUARANTEE you that the seller is waiting for the PURCHASE AND SALE to be signed.
This is very common concern that buyers have today, but there is nothing for you to worry about if you have a fully executed agreement (all parties have signed it and have a copy in their possession), as Offers to Purchase are legally binding contracts in MA. The reason this occurs (these days anyway) is because the mortgage industry has been quit shaky since the lending requirements were changed back on August 4th. Back in sept, I had a closing lined up for one of my sellers. Offer was executed, home inspection had been done, P&S was completed and the appraisal and mortgage commitment and all of the title work had been completed. Less than 24 hours before the closing was scheduled for, I recâ€™d a call informing me that the buyers mortgage company had gone out of business and the buyer no longer had financing. We gave the buyer a grace period to find alternative financing, but they could not secure any, because they were a sub-prime borrower. Luckily, I had continued to market the listing during this time and had a back-up offer on the table, so the sellers were able to continue on without skipping a beat. We did follow the MLS rules and regulations as Scott mentioned. Just be sure you follow all of your deadlines through, because if the seller does have a back-up buyer he/she may not grant you any extensions, especially if the other offer is higher and/or has more desirable terms.
Another thing to watch out for that I have been experiencing, is that the lenders are now targeting â€œdeclining marketsâ€ and requiring additional deposits. I worked with a buyer who had 100% financing. During the period of the contract, the lender announced that the community he was buying in was declining and now required a 5% deposit. This would hurt most buyers and prohibit them from going forward, but my buyer had the money in a savings account, so we were able to go forward. Sellers are aware of this change now, and this is another reason why they may continue to market their listing. I hope this helps you and best of luck!!
Article II - Selling Procedures
Section 2.6 Reporting Listings â€œUnder Agreementâ€
By the Deadline for Filing, the Listing Broker shall File notice with the Service of each Listing that is â€œUnder Agreementâ€. If the Listing Broker shall also File with the service an Active Status Request Form, then that Listing shall be deemed to be â€œactiveâ€ for the period specified in the Active Status Request Form and shall be properly identified as such in the System. For so long as the Listing remains â€œactiveâ€ pursuant to an Active Status Request Form, the Listing Broker shall diligently and in good faith continue to show the Listing and seek additional offers for it. A Listing that is â€œUnder Agreementâ€ shall be deemed to be â€œoff marketâ€ if no Active Status Request Form has been timely Filed in respect to the Listing or if the active period specified in such an Active Status Request Form has expired or been terminated by the Seller.
Deadline to Report a Listing as UAG or Sold
Language was added to Sections 2.6 and 13.0 to clarify the listing broker's obligation to report status changes in the event that a property sells or goes UAG. The deadline to report each change is:
UAG: 24 hours (excluding weekends and holidays) after the seller and potential buyer have executed a signed purchase and sale agreement, or if earlier, executed a written bilateral offer to purchase or equivalent bilateral agreement.
Sold: 24 hours (excluding weekends and holidays) after the recording of the deed at the Registry of Deeds.
Hope that helps
In New Jersey, there is a three day attorney review period after a contract has been signed by both parties. During this period, other offers can be considered and possibly accepted. After the attorney review is concluded, offers can still be submitted up until the day of closing, but they can only be considered back up offers only.
It is customary to wait until the attorney review is concluded and the home is placed "Under Contract" before any inspections or appraisals are done. This prevents the Buyers from wasting time and money. Also, we are not permitted to put any wording in the contract that suggests the Seller remove the house from the market before attorney review is concluded.
Do you have a contingency of some sort in your contract that would make the Seller(s) want to keep the property active on the market?
I would be happy to discuss it further with you. Feel free to e-mail me at JanetLevy@JanetLevy.com. Good luck!
Crossroads Realty/Lacey Office
Is what you said in CA law, or a common practice?
My agent doesn't seem to be familiar with that. She said it is probably the choice of listing agent. I will ask her about rule you mentioned.
However, today I came up with the question after reading this.
I am a first-time buyer. So I hope to understand the point of earnest money and learn how to protect myself in the transaction.
We have a certain number of days to have the inspections, loan approval, etc before we remove the contingencies.
It is normal for an agent to either keep the listing ACTIVE or BACKUP OFFERS until all contingencies are removed. They don't want to lose valuable marketing time if the buyer backs out for some reason.
Have you asked your agent about this?
Lots of luck!