An active contingent status on a short sale designates that that home has received an offer from a buyer and the seller has accepted. Buyer and seller are awaiting the approval of the bank to finish the transaction. The finalization of the sale is ‘contingent’ on the bank’s approval.
The active contingent part of a short sale is a crucial time than can make or break the sale. Whether you are a buyer or seller, it is important to understand what an active contingent status says on a Multiple Listing Service, and what it does during final mortgage negotiations.
Active contingent on a MLS
This more or less says that the deal is near completion—buyer and seller are waiting for the bank’s sign to seal the deal. Sellers’ agents during this time will be negotiating hard for the best deal but not always the best price.
Buyers are an impatient and fickle bunch, and short sales can seem a dime a dozen. Because of this, the contingency process is a way of creating a feeding frenzy amongst buyers. This bidding war may scare off some buyers or encourage others that the property is worth the time and effort. Either way, sellers and banks can pick the best offer from a handful.
Agents will send different offers to the bank, and the agent, with the seller’s approval, can send back up offers. This gives the bank a good picture of a home’s worth and speeds up the short sale process.
Essentially, the active contingency process, if played well can be exploited to drum up interest in your home and get a better price. Of course it is only one aspect of the short sale process, but an interesting one that may help you sell your home.