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?

Asked by Lanna, Maryland Wed Mar 26, 2008

have?
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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Answers

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Unless the buyer is paying all cash and has absolutely NO contingencies, the status is CNTG/NO KO. Every buyer of mine goes in approved by a bank, but they are not FULLY approved because no bank will fully approve a loan until:

- a ratified contract is the lender's hands
- an acceptable appraisal has been completed
- title search has been completed
- final verification of borrower's assets/liabilities/paperwork/etc

Once these conditions have been met, then the underwriter can give final approval, NOT before then. This is why, even though you have been pre-approved, you should still ask for a Financing Contingency and an Appraisal Contingency.

As far as CNTG/KO, that's usually a Sale-Of-Home Contingency. Most people can't buy a new home without the proceeds from the sale of their current residence.

As far as your situation...if you've spoken to a lender and they've provided you with a Good Faith Estimate and Lender Letter (pre-approval letter), then you're good to go.

The term "pre-approval" and "approval" are used incorrectly a lot of the time. A more proper question is "Do you have a lender letter?" The lender will state that you are approved for financing and that the only conditions are the ones I mentioned above.

Hope that helps...if not, let me know.
Web Reference: http://www.LoudounStats.com
3 votes Thank Flag Link Wed Mar 26, 2008
Hey Lanna,

It's been a while since your original post, so you may already know all of this, but I hope I can help.

Pre-approval means you have a letter from your bank saying that you can afford "blank" amount on a house. You may not feel comfortable spending as much as you are pre-approved for on a house, but that is a judgment call on your part and what mortgage payment you feel you can live with.

Approval is when you are ready to put an offer on a house, have gone through the entire process of all the paperwork with your lender and are locking in a loan rate in preparation for a ratified contract. Ratified contract means your offer, or their counteroffer, has been accepted and SIGNED by all parties.

You can find some really good deals on foreclosures, and if you have the patience, they can really pay off. However, in a foreclosure you are dealing with a bank, not a homeowner, and banks are notorious for holding up paperwork to close the deal on a foreclosure. I've even come across ones where the bank selling the home didn't possess the deed yet because they had bought it from another bank who lost it in a file somewhere, and it took 3 months to clear up that mess. You could get lucky and have no problems, but be prepared to sit and wait 3-6 months if you find your dream home through a foreclosure.

Another sticky situation can be a short sale. This is when the homeowner is having to sell the house for less than what they owe on it, most likely due to taking equity out when the market was so high and then values dropped back to normal. When a house is under a short sale, the sale is contingent on the owner's bank's approval of the contract and sale price. Some deals can be had, but again, be prepared to wait.

There are tons of great homes at good prices in the Ashburn area that are not foreclosures or short sales. A good agent will help a homeowner price their house appropriately for a quick sale. These don't last long on the market - usually only a couple of weeks - so you have to move fast when you find one, and you can get to closing in as little as two weeks if your lender works well with your agent. Talk to your lender at least once a week so he/she knows how interested you are and how fast you want to move once you find your home. If you find a CNTG/KO, you could swoop in, with your lender's help.

Buying a home is an emotional process, and you may come across sellers who just seem crazy, especially when it comes to home inspections and things you think should be fixed before you go to closing. The seller could just refuse, but unless it's major, try not to sweat it. A good agent should guide you through the process and help remove your emotions from the weirdness, so you can close the deal on the house you really want, because that is your ultimate goal.

You mentioned you had been looking in MD at one point and are now looking in VA. I'm with Kangal Real Estate in Arlington, VA, and we are all licensed in DC, MD and VA, so we have to be familiar with all three. If you have any other questions. Feel free to contact me anytime.

Kelly Putz
kputz@kangalre.com
1 vote Thank Flag Link Fri Jun 5, 2009
CNTG/NO KO means that they are not actively accepting offers, but you may want to check if they'll take a back up offer.

CONTG/KO means that they are still accepting offers because they can "Kick Out" the first accepted offer. But...it's usually due to something like a Sale-Of-Home Contingency, which the first buyers typically have 72 hours to make good on/remove.

If the inital buyers remove it, then your offer is no longer accepted. If they don't remove the "Kick Out" contingency, then you're offer is accepted and you're in.

I am a Buyer Specialist who specializes in Ashburn, Sterling and Leesburg (Eastern Loudoun County). If you need an information on foreclosure/REO or short-sale properties in the area, check out my blogs (one is listed below) or contact me directly.
1 vote Thank Flag Link Wed Mar 26, 2008
This is the best and clear response listed. As agents we shouldn't be afraid of putting real estate lingo into laymans terms for our consumers. Way to go Dan in being honest and up front.
Flag Tue Feb 19, 2013
There was home that hit the market last month that i was interested i, i saw it the very first day it hit the market the disclaimer said had to be Pre approved, had to make an appointment and it would only be show on the week in and this was the early week, the next day its off the market with CNTG/NO KO. how does this happen?
0 votes Thank Flag Link Tue Jan 7, 2014
The listing agent may have had a buyer lined up when they listed it.
Flag Wed Jan 8, 2014
Unless there are unusual circumstances that would interfere with a new loan, you could be making offers now. Without knowing the reason for the delay, it's hard to say. Generally, a Pre-Qualified or Pre-Approved with conditions is sufficient to get a ratified contract.

Loudoun County has a tremendous inventory and sellers are looking for offers. If you're out looking, it's hard to understand why you're not making offers. Homes under a KO contract will usually accept a good offer and give the present contract a deadline to remove their contingency or they'll simply be "kicked out".

Good luck.
Web Reference: http://www.homefinders.com
0 votes Thank Flag Link Tue May 6, 2008
Pre-approval means you look good, you'll need to provide more info before they commit to lending to you. An approval, or a commitment means the bank has money for you, they're just waiting for you to find the right house.

Once a buyer and seller agree to terms...price, settlement date etc, and it's in writing, they're locked in to the contract. The buyers should have commitments before they buy but not every agent does things the same way...as you seem to be finding out! Check out my site if you'd like to contact me directly with any other questions. Keep the faith!! A good agent will make the process as stress free as possible. And fun too!
Web Reference: http://www.BuywithNancy.com
0 votes Thank Flag Link Wed Mar 26, 2008
Okay....I keep getting the same answers but no one is answering my question. Maybe I am not understanding. What is the difference between pre-approval and approval? We already know how much house we can afford with the pre-approval. The bank told us a number and it's on the letter we provided to our real estate agent.

Also, the people with the houses CNTG/NO KO and KO .....did those people not have their finances ready? Aren't some of them waiting to see if they get approved by the bank? or am I completely wrong?

We have already submitted the rest of our stuff to the bank for approval anyway (not just pre-approval)...I am just trying to get an understanding of all of this because we have talked to/been out with 3 different realtors and all 3 of them told us different things.

It's all getting very frustrating....we started this whole process 2 months ago....and I feel like we have gotten no where.
0 votes Thank Flag Link Wed Mar 26, 2008
Dan's answers on CNTG/KO and CMTTGNKO are correct. Although you can make an offer on a property with either status. The listing agent is duty bound to present it but if it's CONTG/NKO, the best you could do is go into a backup position.

It absolutely makes sense to get approval before you go shopping for a couple of reasons: 1. If there are problems on your credit report (ex. somebody steals your identity), you need to clean that up first, 2. When you're approved, you'll know exactly how much you can afford. The financing options are changing daily. Wouldn't you like to go shopping for a home knowing with certainty that you can really buy. It's a horrible feeling to put an offer in on the home of your dreams only to be on pins and needles throughout the process wondering if you'll actually be able to buy it. And you'd be heartbroken if after 30 days, you were declined! Let me know if you need further assistance.
Web Reference: http://www.buywithNancy.com
0 votes Thank Flag Link Wed Mar 26, 2008
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