In Massachusetts when you are marketing a seller’s home and you procure a ready willing and able buyer to purchase a property you have hopefully started your journey to a successful closing.
One of the things that Realtors are required to do is change the status of the property when we have a signed contract between a buyer and seller.
Realtors are given one of two options in the Greater Boston Multiple listing service (MLS) when you have a contract. You can either mark the home “under agreement” (UAG) or “accepting back up offers” otherwise known as (BUP).
It is up to the seller on which way they feel makes the most sense. In most circumstances trying to decide which way to mark the status will usually come down to what the Realtor recommends.
There are a number of Realtors that just flat out tell their clients to mark the home as accepting back up offers. This is down right foolish! I am in the camp that does NOT give this advice and here is why.
9 times out of 10 when a buyers agent sees a home in the MLS marked as accepting back up offers they are not going to show the home anyway. This makes perfect sense. Why take the time and effort to show a home that for all intents and purposes is really under agreement? The only way a buyer could actually purchase the home in a BUP status is if the 1st buyer backs out. Most Realtors don’t want to get a client excited about purchasing a home that more often than not is already going to be sold.
The second reason is even more important to the seller. When you mark a home as accepting back up offers the status of the property is technically still considered “current” by MLS standards. What this means is the days on the market continues to elapse when in the BUP status.
The Realtor is also required to put the reason why the status is marked as accepting back up offers. Some of the most common reasons include the signing of a purchase and sale agreement, home inspections, or the buyers financing commitment.
So here is the rub. Lets say the Realtor marks your home as accepting back up offers (BUP) and gives the reason as the buyers financing commitment. Lets also assume your home has been on the market for 45 days.
Generally speaking the time needed to get a mortgage commitment from a lender is around 30-45 days from the time the lender takes the buyers application. What happens if the sale falls apart during the time frame it is marked BUP?
The unfortunate answer is that when your home comes back on the market the days on market will include all the time that is was marked BUP. It will show in Multiple Listing Service (MLS) like your home has been on the market for quite a long time!
This is NOT the case if you had marked the home as under agreement. When a home is marked under agreement the days on market clock stops! So in the above example if the home was marked UAG and came back on the market the market time would read 45 days.
Why is this so important? I have never met a buyer in my twenty four years in the business that did not ask “how long has the property been on the market”. Every buyer wants to know this because it will give them an idea what their leverage will be when making an offer! When a home 1st comes on the market a seller is in the drivers seat. As the market time grows the seller loses their negotiating leverage.
After a certain time period buyers will start to mentally ask themselves why has this home not sold? Am I making the right decision purchasing this property?
If two similar homes are on the market and one has been on for 14 days and the other for 200 days which home do you think a buyer will feel like they can negotiate a better price on?
Believe me I ask myself all the time why some Realtors give the advice they do on various Real Estate subjects. This one is a real puzzling to me. Is it just the heard mentality? Is it a lack of confidence in their ability to keep a deal together? Is it the seller telling them this is the way they want it to go and the Realtor just says “OK” without explaining the disadvantages?
Inquiring minds want to know!
About the author: The above Real Estate information on marking a property under agreement or accepting back up offers was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at firstname.lastname@example.org or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 24+ Years.
Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service the following towns in Metrowest MA: Hopkinton, Milford, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Franklin, Framingham, Upton, Grafton, Northbridge, Shrewsbury, Northboro, Bellingham, Uxbridge, and Douglas.