When is the sale of a home "a done deal"?

Saying it's SOLD is only the first indication that the deal is almost done. When do you put the SOLD banner on the sign in your front yard? Not until ALL the contingencies of the contract have been met -- inspections, financing, appraisal, attorneys, buyers house to sell, everything. A contingency is a condition that must be satisfied for the sale to go through.

Your REALTOR has to be very aware of these things and follow them closely, making sure they are accomplished in the timeframe dictated by the contract. Not meeting dates on contingencies could make the deal void.

If a problem arises with any of the contingencies, then you may have to go back to more negotiating or even fixing the problem before the deal can continue. It can get sticky and be very time consuming. Both the buyer and seller should be aware that "details" matter and be prepared for anything during the final steps of the home-selling process.

Making sure all the details are taken care of, and knowing when it's REALLY SOLD or when it needs additional follow-up, can make the difference in getting to closing -- or not.

When is a listing really SOLD?

1. when the seller accepts an offer from a buyer?;
2. when all the contingencies are removed from the purchase contract?; or
3. when title to the property transfers from the seller to the buyers?
Technically the answer is 3. When title transfers to the new owners the seller no longer has a listing to sell. The deal is done and the buyer takes possession! Up until that time other buyers may have an opportunity to purchase the property, or there may be a chance that the buyer will void the contract, depending on contingencies and circumstances.

When the seller accepts an offer to purchase his home, the listing is classified as SALE PENDING (SP). This means that the buyer and seller have reached an acceptable and mutually binding agreement for the sale of the property.

The most common pending sale is one that is contingent on the buyers inspecting the property and on the buyers obtaining financing to complete the purchase. As long as the buyers remove these contingencies by the deadlines specified in the contract, another buyer will not have an opportunity to buy the property.

Sellers may, however, negotiate with other buyers for a backup position. A backup offer moves into primary position if the first contract falls apart. But, the sellers cannot arbitrarily move the backup buyers into the primary position.

A sale SUBJECT TO CONTINGENCY (STC) is another type of pending sale that offers purchase opportunities to other buyers. The home may continue to be shown while an STC is in place. An STC is when the sellers have accepted an offer that is contingent upon the sale of another property owner by the buyer. If the buyer's home doesn't sell within the time specified in the contract, the contract may be void and the seller may have to find another buyer.

With an STC offer in Winnebago County, if the seller receives another offer he can invoke a release clause, giving the 1st buyer 72 hours to deliver written notice to Seller of removal of this contingency and all other Buyer contingencies AND (a) provide a written commitment for a non-contingent bridge loan, OR (b)  provide evidence of available funds sufficient to allow buyer to complete the transaction, or the contract is void.

A listing is designated SALE PENDING (SP) in the Multiple Listing Service until the property transfers to the buyers at closing. Only then is the listing status changed to SOLD AND CLOSED (SC). However, you may see a sold banner on a for sale sign or in an ad before title transfers. It's an indication that all contingencies have been removed from the contract and the sale is  pending only closing and title transfer.

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