Should Showings Continue Once your Home is Under Contract?

By
Real Estate Agent with Long and Foster REALTORS®, Gainesville, VA VA License # 0225089470

Should Showings Continue Once your Home is Under Contract?

Getting your home under contract feels like you have crossed the finish line of a race.  Your home was chosen and is now off the market.  Let those other sellers, still unchosen by a buyer, deal with making their beds daily, making sure all the clutter in the home is under control and leaving the lights on.  

It is true that once your listing is marked as under contract, most buyers won't even ask to see it.  Did you know there are three variations of marking your property under contract in the Northern Virginia MLS?  Here they are:

CNKO--Contingent with No Kick Out

CKO--Contingent with Kick Out

CONT--Under Contract with No Contingencies

Most times a property goes under contract, there are contingencies for the buyer like home inspection or appraisal.  In those cases, until the contingencies are removed, the listing is marked as CNKO.  That means that the seller can't kick their buyer our of the contract.  All but one of the possible contingencies a buyer can add to a contract allow a buyer to dictate whether they stay in a contract, or a void. 

Sellers have an ability to kick out a buyer with a home sale contingency.  When you go under contract with a buyer that still needs to sell their home in order to complete the purchase, your listing will be marked CKO.  That means if you get another offer on your home, you can give notice to your buyer to remove that home sale contingency or the contract becomes void, meaning you can move forward with your next contract.

Of course, being listed as CONT is about as secure as a deal can get.  The contingencies have been removed and the parties are going to settlement.  There are no more "outs" in the contract.

It is obvious that if you are listed as CKO, that showings are still welcome.  However, if you are listed as CNKO, should you allow your home to be shown?  Sellers likely think there is no value in more showings if they have accepted an offer, no matter the contingencies remaining.  Showings can be inconvenient.  Keeping the house neat and then being exiled from your home while a buyer tours, is a pain.  Let me tell why you should still show your home if it's listed as CNKO. It's an actual example from my business.

Just this month, I had sellers that went under contract with buyers that had an appraisal and home inspection contingency.  The sellers hadn't gotten the net they wanted out of the deal, but they did get close enough to make the deal with their buyer.  However, the buyers were dragging out their home inspection contingency to the end of the deadline, despite having had the actual inspection over a week earlier.  By the time the sellers were likely to hear back from the buyers, they were unlikely to be able to do anything other than give a credit for any requested repairs. They feared the buyers would walk without repairs or some sort of compensation.  It was just days before the Christmas holiday.  With every day that passed after the inspection, time was running out to get quotes and make a reasonable counter offer to any repair requests.  It was really making my sellers feel they were being backed into a corner.  All we knew is that repair requests were coming.

As the deadline for the inspection was running out, my phone rang.  A buyer's agent was on the line asking how strong our deal was.  He had a buyer looking in the area for similar homes, but his buyer didn't like any of them.  I had no idea how strong our deal was, but knew the buyers were backing my sellers into a corner on a deal in which my sellers already felt a little screwed.  I made sure the buyer's agent showed the home and sure enough, his buyer wanted it.  I encouraged them to write up a back up offer, which I had in my hand later that night.  Wouldn't you know, the offer was stronger than what we had.  Not by leaps and bounds, but enough to give my sellers the confidence to say no to any repairs or any possible price reduction on the appraisal, which was also still hanging out there.

That's the negotiating position sellers dream of.  You may not be able to force the first buyers out, but you don't have to be held over a barrel to comply with their requests for fear of losing them.  And if you lose the first buyers, you have an attractive back up offer.  Either way, the seller wins.

Naturally, you don't get to be in that negotiating position by not allowing showings once you are under contract.  As long as there is a contingency on the buyer's side, say yes to any showing request.  Back up offers give sellers all the negotiating power.  

 

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Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Chris Ann, I love back up offers for exactly the reasons you mention.  They're great for keeping the original contract buyers inline if they get unreasonable.  We don't have varieties of Pending here other than in the agent notes.  It's rare to see showings once a home is marked under contract.

Dec 30, 2017 06:09 AM #5
Rainmaker
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Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Chris Ann. Your post is excellent. That said, I think it is different in every state. In my view once the buyer has spent money on an inspection or appraisal the time for continuing to show is long past. Happy New Year.

Dec 30, 2017 07:48 AM #6
Rainmaker
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Mike Cooper
Cornerstone Business Group Inc - Winchester, VA
Your Winchester, VA Real Estate Sales Pro

Chris Ann, that's a great blog to get people thinking. I only let additional showings if the seller is on board and concerned about the contract. Otherwise, I change the Sentrilock to a combo box.

Dec 30, 2017 10:38 AM #7
Rainmaker
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Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

I do a lot of upfront work which enables to choose wisely and go from there

Dec 30, 2017 10:38 AM #8
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Hannah Williams
Re/Max Eastern inc. - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-953-8818

Sorry Chris Ann Cleland  I disagree . We have time limits on the inspections  and response times .  Yes there are exceptions to the rule . Time is of the essence in these matters I will hold strictly to in this type of situation . We do have a legal binding contract . Live up to your side and we will live up to ours . 

Dec 30, 2017 11:07 AM #9
Rainmaker
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Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

In the strong seller markets like we are experiencing here in Sacramento, I usually put homes to pending.  It would be an unusual circumstance for me to put it to "Pending-Bring Back Up Offers."  That would likely only occur when a transaction begins to wobble for some reason or another.

Dec 30, 2017 12:51 PM #10
Rainmaker
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Delphine Nguyen
Baird & Warner - Northbrook, IL

Thank you for an  informative and insightful post. Sellers are often backed into a corner and when they are disappointed with an offer, the pressure is really on while they wait out contingency resolutions. Backup offers can be very useful and I think Virginia has an excellent way of classifying offers. 

Dec 30, 2017 01:46 PM #11
Rainmaker
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Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Hi Chris Ann...it's simpler in North Carolina -- two options (1) under contract/show and (2) under contract/no show. I've found that most sellers do not want to continue to show if they feel they have a solid buyer; many agents don't want to show as there's nothing worse than having a buyer fall in love with a house they can't have; and most buyers I work with also don't want to look at under contract homes.

Dec 30, 2017 02:07 PM #12
Rainmaker
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Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Congratulations on the feature Chris Ann Cleland  . Such a good question. In most cases i do not like to show for back ups. If there is a kick out, then yes. But otherwise a lot of work and emotional pain for would be buyers or the sellers when the initial offer should only be chosen if all chances say it is closing  

Dec 30, 2017 02:30 PM #13
Rainmaker
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Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Backups and showings till ALL contingencies are removed!

Dec 30, 2017 03:45 PM #14
Rainmaker
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Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

Back ups are great for sellers.  It gives them power to dismiss petty repair requests.  It's a great feeling to just say no to their requests.  It keeps the buyer on the straight and narrow.

Dec 30, 2017 06:01 PM #15
Rainmaker
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Kat Palmiotti
Grand Lux Realty, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

Here, the MLS status choices are: Active or Contract. And contracts here are usually not signed until after the inspection is done, and repair requests are already discussed. That could take weeks. During that time, most sellers want to continue to show their homes.

Dec 31, 2017 03:48 AM #16
Rainmaker
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Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker and Attorney Licensed in DC, MD, VA,

Have a wonderful new year! I wish you all the best with lots of joy, laughter, success and abundance of health and happiness! 

Dec 31, 2017 05:27 AM #17
Rainmaker
862,635
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

Great post! When we are representing the Seller - that is our job.  Doing everything we can to make things work for them!  THANK YOU

Dec 31, 2017 07:17 AM #18
Rainmaker
526,290
Nathan Gesner
American West Realty & Management - Cody, WY
Broker / Property Manager

Great points, Chris Ann. I've had buyers attempt to use the inspection phase as an opportunity to renegotiate a lot more than what was reasonable. A backup offer gives the Seller the strength to reject the request and move on to something more palatable.

Dec 31, 2017 09:10 AM #19
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Chris Ann

Interesting how different things are there - we don't have those various statuses. It seems that much of the time here that properties are not shown anymore once they are pending, but there are exceptions.

Jeff

Dec 31, 2017 09:34 AM #20
Rainmaker
2,586,929
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Chris Ann,  Your illustration in this post is why we do want to continue to show a home. When all contingencies are removed and we are moving to the close, I remove the lockbox and there are no more showings.  

Jan 01, 2018 09:32 AM #21
Rainmaker
290,617
Jim Paulson
Progressive Realty (Boise Idaho) www.Progressive-Realty.info - Boise, ID
Owner,Broker

If I am the listing agent, I always welcome back up offers to keep my client in control.  I had never heard the term "kick out" clause, we call ours a "bump" clause.

Bank Asset managers seldom take back up offers but don't mind paying for BPO's to determine pricing and market parameters.  Pretty stupid if you ask me!

Jan 02, 2018 12:21 PM #22
Rainmaker
157,363
Mary Jo Quay
Remax Results - Edina, MN

It's interesting that different parts of the country handle issues so differently. In Minnesota, an offer is not considered executed until all contingencies are removed. If a buyer sends a laundry list of repairs, the seller isn't required to respond and can accept a competing offer.  Last year a buyer's agent sent me a very long email about what repairs the buyer might have to make in the future.   It wasn't an addendum, or counter offer, just an email with a photo of the sewer and notes that it was taken at 25 feet into the sewer.  I didn't respond, the agent called to see if I got the 'the buyer's response.'  

"No, but I did get a long email from you with your opinions on future repairs.  If there is something you want, you need to write it up on an addendum."

He sent me a 2nd shorter version of the email.  Again, I asked for an addendum.  Finally, he sent an addendum demanding that the seller reinspect the sewer line because they only could get it out 15 ft. (the photo was taken at 25 ft). And a long list of repairs. 

The seller is an attorney which made it more interesting.  I responded that according to MN law negotiations are reopened, and we can consider other offers.  After a minute or two of arm flapping and huffing, the agent canceled all requests, the buyers would take it as is. 

 

Jan 02, 2018 04:11 PM #23
Rainmaker
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Claude Labbe
Real Living | At Home - Washington, DC
Realty for Your Busy Life

Chris Ann, not all agents are as savvy as you, nor as the buyer agent in this story.  Many people are just get it signed and get it done, though that doesn't always truly mean helping the seller.

I've had a number of sales where the 2nd sneak in from behind while in contract is the eventual owner. Usually in those cases, a very happy 2nd buyer and very happy seller with a 'what just happened' 1st buyer.

Jan 28, 2018 08:08 PM #25
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Chris Ann Cleland

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