03 Feb Why do so many homes for sale on the internet already have offers?
Buyers are heartbroken to learn the home they studied on a website for more than an hour last night is already sold!
The true Multiple Listing Service used by Realtors shows if a home has an offer on it, but this information is not forwarded to websites viewed by home buyers. I’m not certain why this information doesn’t follow the listing out to the general public.
“It’s confusing for homebuyers and skews the perception of how many homes are for sale,” one of my colleagues said yesterday.
Buyers pull up long lists of homes for sale on various websites from Real Estate Brokers like Remax, Edina or CBBurnet and from private sites like Trulia and Zillow. They naturally believe the selection of homes is endless and mistakenly feel they can take their time looking and deciding because there are so many homes on the list. However, when we eliminate the homes already sporting an offer the selection drops very quickly.
This morning, I was doing a search for a young client looking for his first property. I pulled up all homes for sale in Burnsville, Apple Valley and Eagan. He is mainly looking for Townhomes, but I left in both townhomes and single family homes for sale too. The amount of homes for sale under a list price of $140,000 is 217 homes, actively on the market. However, when I filter my search criteria and take out all properties which have an offer on them, the number of homes and townhomes for sale in Burnsville, Apple Valley and Eagan drops to just 119 homes. Nearly 50% of the inventory in that price range already has an offer.
His specific criteria include a minimum of 2 bedrooms, 2 baths and a 2 car garage, the initial number of homes for sale is 111, but when filtered to remove homes with offers on them, the number of homes for sale is just 61.
Why does this happen?
Listing agents keep the home in the Actively Listed category and put the “yellow bar of contingency” on the home instead of moving the home to a new category of “Pending”. Homes that stay in an ‘active listing’ category are still displayed on other websites while homes in a ‘pending category’ on the Realtor’s system do not show up on other websites.
Listing Agents keep the home active because the fall-thru rate of purchase agreements is abnormally high, mostly because of foreclosures and short sales. Purchase agreements on active homes are all ‘Subject to a contingency’. The contingencies include inspections, approval by banks, sale of another home or appraisal. Purchase agreements often dissolve because:
1. Buyers have an inspection and decide the home needs to much work. See the post 4 repairs commonly requested by buyers.
2. The purchase agreement needs approval from the Seller’s Mortgage, commonly called a short sale. Many weeks go by and buyers grow tired of waiting or spot a better property and cancel the first purchase agreement. See 3 Reasons it takes so long to buy a Short Sale..
3. The appraisal on the home calls for repairs which neither the buyer or seller are willing to provide or the property doesn’t appraise for the agreed upon purchase price. See What to do about a low appraisal…
4. Mortgages are more difficult to obtain, the standards of qualifications are higher and the details of a buyer’s financial picture are scrutinized more rigorously. Buyers are pre-approved prior to putting in an offer, but if their financial details do not satisfy the underwriters they are denied the loan.
The best way to be sure you are seeing accurate information is to have your Realtor set up a search for you in the Multiple Listing Service (the MLS). Your Realtor can even create the search to screen out properties which already have offers and set up the search to automatically bring new homes to your inbox.
If you would like a search for homes based on your customized criteria, filtered to screen out homes with offers, sent to your inbox daily, just send me an email, or use our Drop me a Line contact form. We are happy to set up a comprehensive search to help you cut through the clutter of properties online.
Click here to Search for all homes listed in Farmington!