You've worked with a lender to get a pre-approval letter. You've done your research. You've driven through the neighborhood and you've finally found that elusive property that you want to buy.
The price is right. The floor plan is perfect. The pictures are remarkable-this home was built with you in mind. You glance anxiously at the status expecting the worst, but it shows "Active". You breathe an audible sigh of relief - It's still available. Alas, you call your buyer's agent (you are working with a buyer's agent, right?) to have her check on the status and much to your dismay the object of your affection is now under contract or has multiple offers. Sound familiar?
Well, if it doesn't, you haven't been looking for a home for very long. An 'Active' status no longer assures the buyer that a property is available-it's becoming more and more commonplace these days.
Why is this "Active" home not available?
In most circumstances, the listing agent simply hasn't updated the MLS with the correct information. This could be because the agent is:
3) just one cog of a larger team and is unaware that his team member just received an offer
4) attempting to get additional offers as back-ups. It is fair? No. It is reality? Yes.
For the most part though, you can be confident that if a non-distressed resale (yes, they still exist) shows as active, it is actually available. The most egregious offenders are the listing agents of foreclosures and short sales.
While it would be easy to disparage the foreclosure listing agents across the board for incompetence or general ineptitude, but this is not the case. Sure, there are plenty of listing agents that are horrible and do a disservice daily to their clients and to buyers, but there are also many listing agents who don't deserve the bum rap.
In my experience, most of the delay in updating a home's status is due to banks verbally negotiating deals. This type of negotiation leaves the listing agent with no binding contract (oral purchase & sale agreements for real property are not legally binding), but with an oral agreement between seller and buyer. Thus, the listing agent is in the right to continue to market the property as active and available as there is no binding agreement on the home. Until the paperwork gets sorted out and both parties sign the agreement along with any bank addendum, there is no contract. It's still an active property, but one that has been "spoken for".
In a short sale, most banks want an executed contract between buyer and seller before they will review the short sale request. By rule these "binding" short sales should be updated in the MLS as "Pending" or "Contingent Other", but many times they are not because the agent mistakenly thinks it isn't binding because it needs bank approval. They are wrong. This is what happens when you have many unqualified agents trying to do one-off short sales. They are unfamiliar with the process and procedures and simply don't know any better. Unfortunately, this is costly not only to the seller, but to you as a buyer.
My advice is to always check with your buyer's agent or the listing agent directly (if you must) before taking time out of your day to see a home. In today's market, flush with foreclosure and short sale inventory, this should be the first step you take in your due diligence of any home.