This is an excellent question -- one that many Buyers are asking in today's uncertain market with so many Short Sales and REO (real estate owned) Bank Owned properties.
As a local Ventura County REALTOR, I have access to the specific MLS Rules and Definitions pertaining to our local area. Here's the actual condensed version of the answer to the question:
10.1 Reporting of Sales. Listings with accepted offers shall be reported to the MLS or input into
the MLS database as "pending" within 48 hours of the acceptance by the listing broker. The listing shall be published on the MLS as pending with no price or terms prior to the final closing. Upon final closing, the listing broker shall report or input the listing in the MLS as "sold" and report the selling price within 48 hours
of the final closing date. Listings which were not input into the MLS as a result of the sellerâ€™s
instructions may be input into the MLS "sold" data at the listing brokerâ€™s option.
All three participating (Conejo, Simi Valley & Ventura) VCRDS MLSs (CVAR, SVMAR, VCCAR) require that any listing with an accepted offer shall be reported to the MLS.
This includes Short Sale/Lender Approval listings. If the seller accepts an offer subject to Lender Approval, the listing (with the contingency of Lender Approval or Short Pay) should be marked with a Contingent, not Active Status.
Short Sale listings which have a contract that has been signed by the Buyer and Seller, and have been forwarded to the lender for approval,must have a status of "Contingent Back-up" and in the status comments "Lender Approval". This must be done within 48 hours to comply with MLS Rules.
The confusion you are experiencing is a result of BANK OWNED (REO) Listing agents taking advantage of the system and reporting "Pending" transactions which are IN ESCROW as Contingent. This procedure is done to encourage Back-Up Offers on a property which is ALREADY in escrow. In the event the 1st Buyer cancels escrow (for a variety of reasons, incl. inspection discoveries, loan issues, etc.), the REO Bank wants to immediately move on to the next Buyer. They hope that "Contingent-Back Up" will encourage more BACK UP ONLY offers, while Pending status will deter any more offers from being submitting. After the current Buyer removes ALL of their contingencies, the Listing Agent will post the change and the property will become Pending, until Sold.
Also, the City of Oxnard had available $500,000 in down payment assistance funds. Low-income first-time buyers could receive up to $35,000 in down payment assistance! For more information, please call:
The City of Oxnard, Affordable Housing and Rehabilitation Department at 805.385.7400 to inquire as to future fund availability.
There can be multiple types of pending sale. The first definition is simply an offer that has been accepted. Pending - Show means that the contract may be under contingencies (periods that allow the buyer to cancel the contract without harm). Pending - with release is a contract that is dependent on the buyer selling their home to complete the contract. A pending-release normally allows the seller to accept other offers and provide the first buyer a notice to remove their contingencies or release the contract so that the seller can accept the new offer. Finally, pending-no show typically means that the contingencies have been released and the contract is moving toward a close of escrow.
During any time in the contract stages, the listing agent and seller can request and/or accept back offers. These offers simply are holding places in line in case anything happens to the first offer.
Thank you for asking your question....
Pending means there is an accepted ofer and contract on the subject property that may or may not have contingencies in place. The contract contengencies could be "subject to financing", "subject to obtaining insurance", "subject to inspection" etc. This means these items need to be accomplished prior to the contract being finalized.
If a property is advertised and "back ups needed" it means the sellers have an agreement that may have unsatisfied contingencies so the seller is inviting other interested buyers to submit offers to be considered only if the first contract falls apart.
We hope you find this information helpful.
The Eckler Team
contingent-first back up- If the first contract falls through this one gets it the backup should proceed as if they are buying the house even though the other contract is in first