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.