First of all, most people already know that “MLS” stands for the Multiple Listing Service. But what many people don’t know is that the MLS contains all kinds of info that the public CAN’T see, but a Realtor CAN. Now, keep in mind, this information differs greatly from state to state. In Texas, for example, not only does the MLS contain listings of homes for sale, but also everything that’s available to RENT as well! How convenient is that? Minnesota has newly added this feature, but it has not been widely used yet.
Here, in my home state of Minnesota, the MLS contains mostly homes for sale – past and present – including land, lots, commercial buildings, townhomes, condos and the like. What John Q. Public can see is only the real estate currently listed as “Active” for sale (or rent), meaning they are currently available for offers. They may already have an accepted offer contingent on some outstanding item, but are still considered “Active” in the MLS. They may, for example, be “Active”
contingent on the buyer getting their inspection complete. Once the inspection is completed, the buyer has a small window of time to move forward on the sale, cancel, or even ask that something from the inspection be repaired or modified before they proceed.
Many of the “Active” listings in the lower price ranges already have accepted offers on them but are awaiting “third party approval” (usually a bank) or other contingencies, and most of those can sit for long periods of time waiting for that bank to approve. Often too, because it’s sat so long, there are many multiple offers in line in case the first one falls through.
To give an example, today, as I’m writing this article I’ve run a search: all single family homes in Hennepin County that are “active” homes for sale at or under $100,000. There are 481 houses fitting these criteria in the entire county. Of those, 211 of them already have accepted offers on them. That’s nearly half, which can be confusing to a buyer. Only half of what looks like it is available to buy, is truly available with no offers already accepted.
And banks in particular (foreclosures and/or short sales) have a tendency to keep properties listed as “Active” even if they have multiple offers on them, since only one in ten may ever close. And the reasons for that are broad: circumstances can change over time such as deterioration of the property, a potential buyer drops out, tired of waiting, a buyer finds something else that will close sooner.
Many different scenarios can affect the listing as it sits waiting for the next action. In my search, I also looked at what property has been an active listing the longest and it is a house in Minneapolis for
$59,900 that has been listed for 654 days. The next longest has been listed for 602 days, and has accepted an offer. It’s a pretty fair guess too that the currently accepted offer isn’t the originally accepted offer because most people can’t (or won’t) wait 1 year and 8 months to close on a house.
So you can really see how house hunting has changed with this country’s economic shifts. And one good practice is to get an experienced Realtor who can guide you, answer your questions from the current context and get the full information on a property, not just the quick overview available to the general public.
Alexandria Anderson is a licencened Minnesota Realtor that specializes in finding homes and showing people how to purchase and maintain investment properties. Check out her websites at: http://greatminnesotarealestate.com/ where you can see how the “active listings” are displayed in real time.