By Mark Pruner
Every profession has its own terminology. Some of this terminology is to describe situation that most lay people never think about. One of my favorites along this line is “winter water views”. This is an actual option when an agent lists a property. What it means is that when the leaves are off the trees you can see the water. Now in most cases the water that you can see is Long Island Sound, though I did once see a listing where you had water views of a small pond in mid-country, when the trees lost their leaves.
Contract Phases
Now you would think that the Greenwich MLS that deals with multi-million-dollar properties and has an average sale that it beyond most towns highest sales price every would have their terms for the various phases of the contracting process; and you would be wrong. Where any deals stands is dictated mostly by whatever company’s MLS software technology the GMLS is presently using.
Right now, we are using the FlexMLS system which was founded in Fargo, North Dakota. With the Flex system you get 4 options; Active, Contingent, Pending and Closed. When you list your house, it is in Active status, once there is a signed contract it’s most likely in contingent status initially. This means that the buyer has the power as to whether the contract will go forward. Most of the time “contingent” means that the buyer is trying to get a mortgage and is waiting for the bank, it’s appraiser and the bank’s underwriting department to approve the mortgage application, however, it could be contingent on many other things limited only by the buyer’s attorney’s imagination to shield the buyer’s downpayment from being lost.
In the good old days, pre-Dodd Frank, the bank just wanted to verify your income and have a professional appraiser agree that the property was worth the proposed sales price, which their appraisal agreed right to the penny most of the time. Now days, the bank may be waiting for a variety of things before approving the loan, so that the “contingency” in the contract can be removed.
A couple of years ago, a major bank’s loan processor in Arizona added an erroneous middle initial to my client’s name and proceeded to generate a dozen loan documents with a non-existent
J.” for a middle initial. Instead of simply correcting the documents, the bank’s loan bureaucrats wanted my client to sign a sworn affidavit that he had also been known as having a middle initial “J.” in his name, which had never happened until the Arizona processor got hold of his identity documents. Had he agreed to this he would be approved for the loan the next day. To my client’s credit, he refused to sign this bogus affidavit and three weeks and one contract contingency extension later, the bank approved mortgage and for Greenwich MLS/FlexMLS purposes it then went “pending”.
Now “pending” is a term that I have always thought lacked precision. All contracts are “pending”, its just that some are contingent, and some are non-contingent. Personally, I like “non-contingent” as a status, but much of the rest of the country including North Dakota uses “pending” so Greenwich does too now. Pending means that all contingencies have been satisfied and the contract power is back in the seller’s hand. If a buyer doesn’t close when the contract is pending/non-contingent, the buyer loses their 10% deposit.
In the Great Recession we did see a few people walk away and leave a downpayment for the seller that was in the hundreds of thousands of dollars. I’ve had a deal where the buyer gave up a $200K deposit due to changed life circumstances.
The final status is “Closed”, which just means title has transferred. Now you would think that is straight forward, but people are people, so some agents don’t notify the MLS for a week or even two weeks that the deal is done, and the deal stays pending for days after closing. If you are dying to see what the purchase price was you may have to journey to the Town Clerk’s office if you want to be the first to know of those not involved with the deal. On the flip side an attorney very rarely may be late recording the deed, so the GMLS listing says “closed”, but record title at the Town Clerk’s office is still in the original owner’s name until the deed is filed.
Now these are the listing statuses, but there a set of words that lots of agents use in listing descriptions that may not be immediately obvious, so here is a tongue in cheek list of listing descriptions and want lay people who don’t actually have to sell the house might use in describing the property:
Cozy – Small
Quaint – Small and musty
Character – Needs work
Exceptional – Weird
One of a kind – Weirder
Luxurious – Formerly elegant
Private – Isolated
Charming – Old
Classic Elegance – Older
In town – noisy
Turn-key – only needs a little work
Recently renovated – Needs more work
Fixer-upper – Needs a lot more work
To all house hunters and everyone who has a mother, Happy Mother’s Day.
Mark Pruner is an award-winning real estate agent with Berkshire Hathaway. He can be reached at 203-969-7900 and mark@bhhsne.com
