Back up and contingent short sales are those short sales that have an accepted offer, and are waiting for the bank(s) to come back with the approval terms and price to short sale the house.
The listing agent has changed the status to let other agents know that they have an accepted offer, and most agents will simply tell their clients that they missed the opportunity.
The truth is that for the majority of the shorts sales we have worked on, the buyer whose offer was accepted usually gets impatient and moves on to another home. The buyer’s agent probably failed to notify the listing agent, so the house still shows as having and accepted offer when in fact, there is no valid offer on the house.
Meanwhile, the Listing agent is continuing to work for the bank’s approval ( As they should!). They want to get back the terms that the bank will accept, so there is no mystery on the actual sales price, and any buyer concessions that the bank is willing to make.
Since the buyer has probably walked away, this opens up an opportunity for you to jump right in, and get first shot at the house before it comes back on the market. If the home hits the market again – competition will be everywhere. An approved short sale is like a bank owned home – terms are already established. So take advantage of this strategy to get the house you absolutely want before there is any competition for it.
So how do you find these homes?
Here is what you and your Realtor should do.
Ask your Realtor to look for short Sales that are in Backup or Contingent Status
Make sure the status change to Back Up or Contingent has been over 60 days. This is the time where the current buyers get tired of waiting and walk away.
Your agent should call on each house to see if “The buyer is still hanging in there”
Your agent should make the same phone call at least once a week on the houses you like to make sure the sellers always knows you are still interested.
You should always submit a Back Up offer on houses you like without looking at the house. Make your offer contingent on previewing the home.
Short Sales are usually occupied, and the owners will be less likely to show if they already have an offer working.
There is no need to look at the house until the current buyer backs out, and you are in the first position to buy. Besides, you want to make sure the bank comes back with a reasonable price and terms before jumping in all the way.
As we said, it is a bit more work or your agent, but remember – this is a House that you are buying, so I think making the extra effort is absolutely necessary.