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Articles on Real Estate Investments

The Definitive Guide to MLS Listing Status Codes and What They Mean

Posted on March 16, 2011 | Leave a comment

There are 10 MLS Listing Status Codes in effect. These will vary from region to region in the United States, so check with your local Multiple Listing Service (MLS) for the full list for your region, however, this list is a great starting point to learn about the various status codes for real estate, whether it’s RE1 (Single Family), RE2 (Condo, Villa, Townhouse), or RNT (Residential Rental) – even COM (Improved Commercial & Industrial) uses these same MLS status codes.

A: Active-Available

The seller/lessor is soliciting offers through the MLS. No offer (with or without Contingencies) has been accepted. The days on market count continues during this period.

B: Backup Contract

The seller/lessor is soliciting back-up offer(s) through the MLS. The seller/lessor has accepted a contingent offer. A second offer would be a back-up offer and would become the accepted offer only if and when the first agreement is canceled.

C: Canceled

The seller/lessor is not soliciting offers through the MLS. The seller/lessor and broker have canceled the existing listing contract.

CS: Closed Sale

The seller is not soliciting offers through the MLS. The escrow has closed.

    PS: Pending Sale

    This status means that the home is under contract and the buyer can no longer walk out of the contract on the building inspection results. While pending, a home will no longer be shown. Days on market count is suspended during this period. If the listing is reactivated if the contract falls apart, all of the days on market to date are picked up and applied to the listing.

    Q: Terminated

    Used when the listing agreement between the owner and the listing agent is terminated prior to the listing expiration date.

    R: Rented

    The lessor is not soliciting offers through the MLS. A lease agreement is in effect.

    T: Temporarily Off the Market

    This status is to be used on a short term basis for a home listing that needs to out of the MLS briefly. This could be due to a need for a repair or because the seller has some improvements that are needed based on feedback from showing agents. The home will not be shown during this period. Days on market count is suspended during this period. It resumes when the home listing is activated again.

    W: Withdrawn

    The Seller/Lessor is not soliciting offers through the MLS. The property is not available for showing but the listing contract between the Seller/Lessor and the Broker remains in effect until its expiration date.

    X: Expired

    The Seller/Lessor is not soliciting offers through the MLS. The time frame of the existing listing contract has run out.

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    Posted in News, Real Estate Investing

    5 Questions to Ask Homeowners When Looking at a Home to Buy

    Posted on March 1, 2010 | 4 Comments
    1. Ask them how long they’ve lived in the home. This gets the conversation going and starts the process of you gathering information from the homeowners. (“It seems like this is a nice area to live. How long have you lived here, in this house?”)
    2. Ask them if they plan on living in the same area when they sell their home. The reason for this question is that it gets them to tell you what their future plans are. Knowing what their plans on are huge so you know what to focus on when it comes to negotiation time. They may answer that they may be going to another state, another country, moving back home with parents, or moving in with a spouse or boyfriend/girlfriend. There could be positive reasons or negative reasons associated to the area – for example, they may be divorcing and want to leave the area, which lets you know they are in a hurry to leave. (“I noticed a few shopping malls nearby, seems pretty convenient. Do you plan on living in this same area once you sell your home?”)
    3. Ask them when they plan to get the house closed by. If they give you a specific date, then this tells you a lot about their situation, whether personal or financial. They may tell you they need to close on April 1st because they need to pay tax liens on the property. They may tell you there’s no real fixed date in mind to sell and they’re just looking to see what the market offers. The answer to this question gives you insight into how motivated they are to close by a certain date. (“Is there a time-frame in mind for when you’d like to get this closed by?”)
    4. Ask them if they have a bottom-line price on the home. By getting an answer to this question you’ll gain insight quickly on what the seller has in mind in regard to price and whether you’re on the right track to getting a deal done. (“A lot of sellers I’ve seen recently, instead of doing the whole haggling-price thing, put a final and best price on the home and then put it on the market. This can often make the transaction process much more stress-free. Do you have a bottom-line price on this home?”)
    5. Ask them how much they owe on the property. Not all owners will answer this, but if you can get an answer to this question it allows you to follow up by asking them that if you can offer them their price if they can let you assume payments on the house for a period of a year or 2.

    When asking these questions, don’t just ask the sellers one question after another, rapid-fire style. You don’t want to be an impersonal robot, you want to connect with them on a personal level. You want to engage the property owner in polite conversation, gaining rapport and gaining their trust. You want them to be comfortable with you – this allows them to open up to you and answer your questions truthfully.

    If you notice the questions I’ve written for you above as examples, you may see that none have easy “Yes or No” answers. You want to ask open-ended questions. You ask the questions and then stay silent – let them answer, don’t fill the silence with chit-chat! You ask the question and then wait. By asking these open-ended questions you’re leading the conversation, but they’re the ones talking. Generally, you’re looking for a 70%-30% conversation split, with them being 70% of the conversation. Why would you want to blabber on and on – what good does that serve you? A hiring manager for a company would never dominate the conversation of a hiring interview, they ask questions and then let the applicant speak. Always remember that your outcome in this initial process is to get information on the property and on them as homeowners.  You don’t want to blabber on and on about how great you think the tile is and it’s your dream home or other nonsense like this.

    As a final note, always have your contracts and paperwork with you when you go to look at any property! You never know what can happen – you always need to be ready to take action if the opportunity arises.

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    Posted in Buyer Tips, Real Estate Investing

    How to Overcome Nervousness as a Beginning Real Estate Investor

    Posted on July 30, 2009 | 3 Comments

    If you’re getting started in real estate investing, you might be a little bit nervous about actually going to take a look at a potential real estate investment property.

    Questions in your mind might be, “What do I say to the seller? How do I act? Am I going to seem dumb if I ask a silly question? Should I come across as cool and experienced or should I play it “dumb”? When I should I mention price? When do I start negotiating?”

    Newbie real estate investors and real estate professionals get jitters – I know this, because I’ve been there. We all get scared we might say the wrong thing and “our cover will get blown”. But it doesn’t have to be like this. You don’t need to have a “cover”. You can be yourself and still get the deal.

    The good thing about real estate investing is that if you’re dealing with the typical home seller or real estate agent they’ll likely be clueless to real estate investing. Most people, even those inside the real estate profession, don’t bother to learn about real estate investing. But since you’re interested in real estate investing and you’re investing the time to read this article shows me you have the interest and passion to learn – this gives you a head-up over the average person out there. So let’s get into how to talk to sellers if you’re a real estate investor.

    One of the first insights you get as a real estate investor is that a house is a house is a house. What I mean is that as you gain experience, you start to realize the usual issues that the typical property for sale has, how these issues can get fixed, and around how much it’s going to cost. This comes with experience but really isn’t very difficult to master. It’s a good idea if you’re a beginning real estate investor to bring along a friend that’s experienced in home improvement to give you some price estimates privately after you’ve viewed the property together. Remember that real estate is your business and since it’s your business you need to be constantly learning and improving your skills in all areas, including communication and negotiation.

    So if the issues that investment properties have are pretty similar across the board, what makes the difference from one home to another? The difference is the unique characteristics of each seller. You need to be able to listen, learn when and how to negotiate, and learn rapport tactics that you can use in your dealings with sellers. Think of yourself as a being an interviewer of the seller on a television show. You need to be directing the conversation with your questions, not the other way around with the seller asking you questions. Remember that he who asks the questions leads the conversation. The secret is that you want to be asking your questions so that the seller is free to talk without feeling like it’s an interrogation session – the conversation should be fluid and relaxed.

    Throughout the process of you talking with the seller, remember that the seller wants to talk to you. They have an issue (they want to sell their property) and they’re hoping you can be the person that can solve this issue. Many times people are selling their property due to issues in their personal lives (divorce, layoff from a job, etc). By being friendly and warm with the seller they will likely relax and reveal their “true issues” to you – almost like a real estate therapy session.  You want to be the solution provider, but to do this you need to know all the issues behind the sale.

    One of the biggest tips to feeling at ease when meeting a seller for the first time is get there on time, about 5 minutes before the scheduled time, but not earlier than that and definitely not late. Aim to get into the neighborhood twenty minutes early. Once there and you have that extra time, take a drive around and look at other active listings in the area so you have an idea of how much active listings are selling for in that particular neighborhood.

    You’re going to want to dress relaxed business casual for the meeting.     Don’t dress up too much, but don’t underdress either. You want to come across as someone that has money but that isn’t showy about it. Something along the lines of a short-sleeve polo with beige khaki pants. If you feel the area is very working class, you may want to go for jeans, but usually that khaki/polo combo will work well for you.

    I know some people are going to be more relaxed than others when meeting a seller. Of course, with time and experience, even the most skittish of real estate investors will get the hang of things and before they know it will be gaining quick rapport. My best advice is practice, practice, practice. If you need to, set up two visits in one day: the first one with a property you’re not really into and the second one with the property you’re really into. This helps you because after the first meeting you’ll feel much more relaxed because you’ve gone through that experience already so the meeting with the second seller will generally flow much smoother and you’ll be much more at ease.

    Have you ever gotten nervous when meeting a seller? Let me know how you’ve gotten over your nervousness in the comments!

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    Posted in Real Estate Investing

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