Different Statuses For Homes On The Market And What They Mean
Different Statuses For Homes On The Market And What They Mean
When a home is on the Multiple Listing Service (MLS) listed for sale there are different statuses that are reported on the home. Those statuses help home buyers to know whether a home has accepted an offer, been sold, been removed from the market and even if the home has come back to the market after accepting an offer. Most MLS systems have similar statuses for real estate listed for sale in their market. This article looks at the different statuses and what each means.
Timing Of Status Changes
Generally any time the status of a home changes the change on the MLS must be made by some human input. A real estate agent who is listing the property is responsible for changing the status. Many MLS organizations require that the agents make their changes within a certain amount of time on the MLS after the status is updated in the real world. That means if an offer has been accepted by the seller the listing agent should be making that change in status sooner rather than later. By making the change sooner buyers can take that home off their list and look for other homes and save the time of buyers and sellers alike. Often, after accepting an offer home sellers want to stop the showings from happening in order to minimize the disruption it can cause.
One of the most common statuses on a home listed for sale is the active status. The active status means the home is on the market and still taking offers. As noted above there could be delays in the change of status so buyers may find it helpful to make sure the seller of the home has not accepted an offer yet. With the internet and computers once the listing agent makes a change from active to something else those changes get communicated right away.
With active status generally buyers can schedule a tour of the property during the times allowed by the sellers. In a seller’s Market the time frame for getting into a house and putting in an offer can be very short. On the other hand, with a buyer’s market the buyer may have plenty of time to not only schedule to see the home but also take their time in deciding if they want to make an offer.
Once an offer has been accepted on a home the listing agent should be changing the status to Pending which means an offer has been accepted and the home is pending (waiting) on all the pre-close aspects to happen. During the pending time period the home inspection will take place, the appraisal will be conducted (if being purchase with a mortgage or if a cash buyer wants it done), the mortgage lender will be reviewing the financial background of the buyer to make sure they qualify for a mortgage and more.
Technically a home listed in pending status can accept other offers if the seller so desires. Those offers will become backup offers and if the first offer (primary) offer falls through for whatever reason the backup offer next in line will then become the primary offer. With backup offers a home status will stay in pending status whereas if there are no backup offers and if the primary offer falls through the pending status should be changed to active status so buyers know the home is back on the market.
Sometimes real estate listing agents will reach out to prior buyers who walked through the property and ask if they still have interest in the home if the agent suspects the primary offer will fall through for whatever reason. The listing agent will do this in order to save time for the seller who then has to gear up again for showing their home to any interested buyer. Ultimately this is a decision for the seller to make as to whether to change status back to active or ask buyers who did come through if they have any interest in making an offer. Contracts on buying a home for sale can fall through for any number of reasons including failing to meet appraised value, inspection shows the condition to be something the buyer does not want to deal with, buyer fails to qualify for a mortgage, or more.
Under the withdrawn status the property is removed from active status and is generally done so for a temporary amount of time. The reasoning for withdrawing a property off the market can vary. The homeowner may want to make some updates or repairs, they may have some personal matter to attend to and don’t want to be bothered with showings, they may feel they listed at the wrong time of the year and want to wait a little bit, or some other reason. A withdrawn status does not mean that the listing agreement signed with the listing agent is cancelled. It just means that the home seller wants to wait a short amount of time and plans to be back on the market soon.
Cancelled status on the other hand is when the home seller decides they no longer want to sell their home and want it off the market completely. Maybe the price they need/want to sell for is not currently obtainable, or they just changed their mind and decided they no longer want to sell. Whatever the reason may be the home seller is asking the listing agent (and the listing broker for whom the agent works for) to cancel the listing agreement entirely and take the home off the market. The ultimate decision for cancelling the listing agreement lies with the broker and in most cases broker’s are willing to cancel the listing agreement.
Home sellers need to be aware though of any requirements they are to meet as part of the listing agreement. Some listing agents invest time and money into getting a home ready for buyers by staging, marketing, having photos/videos taken that they are out of pocket and don’t get reimbursed for that until a home sells and a commission is paid. By cancelling a home off the market and cancelling the listing agreement the home seller may find they have to pay for those expenses the real estate listing agent undertook. As always homeowners should be reading their listing agreements carefully and seeking legal advice for things they do not understand.
All listing agreements are required to have a start and an end time. If a home does not sell during the listing agreement period it will automatically switch to an expired status on the MLS. Home sellers can extend their listing agreement or they can sign a new listing agreement to continue to list the home for sale if that is what they want to do. On the other hand if a listing agreement expires and the home seller decides they don’t want to sell right now that is fine too. Just as noted above the seller needs to make sure they understand what they are being required to sign as part of the listing agreement. If they are committing themselves to reimburse a real estate agent for any marketing expenses due to a lack of sale the home seller can find themselves on the hook for paying for that. If there is no agreement as to repayment of marketing expenses and the homeowner decides not to sell their home after it expires off of the market they are done with the process.
Can Their Be Different Statuses?
All these statuses noted above are not necessarily the same across different MLS locations. The terms above reflect the Greater Cincinnati and Northern Kentucky real estate markets. While the situation is the same, i.e. waiting for a buyer to close or temporarily off the market, the word used might be different. Ask a local expert real estate agent about what status words are used in the area being considered which can help further understanding of what is the current status of a home or investment property.
The status of a home or investment real estate is important to pay attention to as it gives valuable clues as to what stage it is in. If the property is not currently open for offers the buyer can save some time by looking at properties that are available for offers. Different MLS areas might have slightly different terms they use but the overall status is usually the same.
- What Does Active Under Contract Mean? - Some MLS systems have a status category of Active Under Contract. Learn about what active under contract means and whether you can make an offer on such a property.
- How Days on Market and Status Work Together - The status of a property does have an impact on the days on market count that the MLS calculates.
- Contingent vs Pending - Learn about what is the difference between contingent and pending when it comes to homes for sale.
- Real Estate Status Codes - Helpful explanation of what status codes mean and when those statuses may change.
About the author: The above article “Different Home Statuses For Homes On The Market And What They Mean” was provided by Luxury Real Estate Specialist Paul Sian. Paul can be reached at paul@CinciNKYRealEstate.com or by phone at 513-560-8002. If you’re thinking of selling or buying your investment or commercial business property I would love to share my marketing knowledge and expertise to help you. Contact me today!
I work in the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde Park, Indian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.