Phantom Property Availability: For Sale, Under Contract, but Hard to Tell
Updated: Jun 10
Have you ever heard of "active contingent"? That's a property that's under contract but listed as active, with no way to tell that it's under contract on some of the most widely used public websites including the top-used public website for searches, Zillow.
How Prevalent? 41% of Houses Entered 7-40 Days Ago as of 6/10/23 in Hampton Roads
This issue is so prevalent that as of 6/9/23, over 32% of residential homes in REIN MLS (the primary MLS of Hampton Roads where real estate agents are inputting properties) that are listed as 40 days on the market or less are listed as active contingent. When I checked the next day for homes that had been entered on the market for 7-40 days, it bumped that number up to 41%.
Main Ways to Avoid the Problem
Within an active Matrix search that I can set up for buyers in the 5 MLS that I have access to that cover most of SE VA, the vast majority of properties in most SE VA locations will not be under contract because I can filter out active contingent properties. The best way to avoid all of the below extra steps is to set up & keep going a search(es) with me where nothing outside of that search would be a consideration (& let me know about any modifications), then click on the search(es) when putting together the most up to date list right before sending it to me for the best information. Also, most of the problems you'll find below will be in Hampton Roads, not in the Richmond area, due to REIN's policy (the dominant MLS of Hampton Roads) that differs from Richmond's.
If ever looking at properties on public websites like Zillow, it's important to check MLS as well before getting too excited about it if it appears available.
Here's a video on the subject:
Locating Contingencies on an active REIN portal search on single property
If pulling those from MLS, remember when looking on MLS that a property can be active but contingent (look for anything listed under contingencies & remember that a property can still be semi-available if it has a "kickout clause" or "first right of refusal" under contingencies, meaning it's under contract but it's possible to submit an offer that the seller accepts after kicking them out if they don't [typically} release a contingency such as a home sale contingency within a certain period of time [typically around 3 days] after you submit a backup offer that the seller likes more than their offer & the seller moves to accept yours), meaning that it's under contract.
If you found the property somewhere else, like Zillow, and want to check on availability, first open your portal. Thank click "Start a New Search". After inputting the address, it's the same process as above.
Locating unavailable properties on an active REIN portal search on property list
Properties in your favorites don't automatically get filtered out when they are contingent or pending (also under contract but further along in the process due to all contingencies being removed), withdrawn, sold, etc. after you initially favorite it without it being removed from your favorites until you take it out.
Also, if it's on your favorites, you won't be able to tell if it's active contingent from viewing a list like the one above. Rather than clicking on the "favorites" like you could below:
Instead, click on "My Searches".
If you want to view your favorites within a search, go to the single-line view which is an option if you click on the 3 dots at the top right:
Once. you've done that, sort by your favorites.
That will filter out the active contingent properties and other unavailable properties, at least as long as those are updated properly in MLS.
Locating Contingencies on REIN.com on single property
Another option even without the portal is to go into Rein.com, and there you'd see the property was under contract upon a search by seeing where it says "Contingent" at the top left immediately after you conduct a property address search:
When are properties least accurate in MLS?
Properties are least accurate in MLS from 24-72 hrs after
A. initial listing,
B. initial picture input,
C. substantive price reductions,
D. relisting (after an extended time period or with a substantive change/price reduction)
They're less accurate from 5 PM-9AM M-F, even less accurate on Saturdays, & the least accurate on Sundays. They're also less accurate on federal holidays, especially Christmas and Thanksgiving which are the most popular with the most agents taking off.
HUD homes are often not updated properly in MLS after going under contract. For any of those, be sure to check Hudhomestore.com for availability. That said, you often won't see the owner in the public view of MLS. Look for language like the following in public remarks:
"Property sold As-Is. Ask about $100 FHA Down payment HUD Program."
Per REIN (Hampton Roads' main MLS) rules, Reports of ratified contracts should be reported to REIN by either the List or the Sell Firm within 2 business days of the executed Standard Purchase Agreement. The Listing Firm must report the accurate Selling Firm and Selling Agent ID numbers. When a contingency is removed, the Listing or Selling Firm has an additional 2 business days after the contingency removal to report the listing as under contract to REIN. Failure to report the contingency removal will result in a $100 fine to the Listing Agent.
More Details
For more details on avoiding properties under contract in the future, here's more on the subject.
Related
Backup Offers: Seeing & making offers on property already under contract
If you'd like more details on how to set up a search on Zillow, go here, where I go over how to do it as a primary search or as a supplemental search to a Matrix search.
For more details on how to work with an MLS search I set up for you, go here, & keep in mind the expeditious showings section and expeditious offers section of that document to help you avoid a situation like this one in the future.
Why In-Person or Virtual Face-to-Face & Screen Share Search Set-Up Meetings Are Best
Most images above courtesy Rein.com & https://reinmls.mlsmatrix.com/