One of the most misunderstood statuses in the MLS is “Active Under Contract.” It means the seller has accepted an offer and the property is in escrow, but the seller is still willing to consider backup offers.
Historically, many buyers would stop looking at these properties altogether. Agents often viewed showing them as a waste of time. After all, if a home is already in escrow, what are the chances of actually getting it?
In a strong seller’s market, perhaps not very good. But today’s market is creating opportunities that many buyers are overlooking.
Looking at CRMLS activity in our mountain communities over the past week, 59 new listings came on the market. During that same period, 82 properties had price reductions, 12 properties fell out of escrow and 21 homes went from fully available to Active Under Contract.
Most buyers searching for a deal naturally focus on homes with price reductions or properties that have returned to the market. Those can certainly be opportunities. But the 21 homes that recently entered escrow deserve attention too.
Current market data shows that the most common reasons escrows fail are appraisal issues and inspection concerns. Sometimes a property doesn’t appraise for the agreed-upon price. Other times, buyers determine that repairs are more extensive than they are willing or able to tackle. When negotiations over repairs or pricing fail, the transaction can fall apart.
With an approximate 40 percent fallout rate, statistics suggest that at least seven of those 21 pending properties could become available again.
That’s where opportunity lives.
The seller has already demonstrated a willingness to sell. They may have already made moving plans, committed to another purchase or started preparing for a major life transition. When an escrow fails, it creates stress and inconvenience that many sellers were not expecting.
That doesn’t mean buyers should immediately submit backup offers on every home they like. In some cases, doing so can actually strengthen the seller’s negotiating position with the current buyer.
Instead, keep an eye on properties that fit your needs. If an Active Under Contract home checks all the boxes, view it if possible and make sure your agent knows you’re interested. If the transaction falls apart, you’ll already be familiar with the property and can act quickly once you understand why the escrow failed.
Not every failed escrow signals a bad property. A repair issue that scares off one buyer may be completely manageable for another. An appraisal issue can provide useful guidance on value.
Our mountain communities are unique because homes are rarely interchangeable. Unlike tract neighborhoods, you can’t simply find the same floor plan down the street.
If you see a property that works for you, don’t dismiss it simply because it’s Active Under Contract. In today’s market, there’s a good chance opportunity may still come knocking.
Theresa Grant is a real estate broker and columnist covering Lake Arrowhead, Crestline, Running Springs, and the surrounding mountain communities. Reach her at (909) 442-1345 visit www.HomesInLakeArrowhead.com, and follow her on social media @TheresaGrantRealtor. Theresa is a Broker Associate with REAL Broker Technologies. DRE#01202881.
0 Comments