Real Estate Terms: “Sold” vs. the Various Stages Along the Way
You would think it should be binary. It’s either SOLD or it’s not. This isn’t however how things work in our real estate system as there are procedures, situations and therefore categories to describe stages along the way. There are also rare exceptions and extreme circumstances which I won’t bother you with but rather outline the major categories that you are most likely to encounter while looking to buy or sell real estate in Nanaimo.
Sold: As you may expect, when you see that red sign that says SOLD or SOLD BY going up on the property and it shows up as sold on the MLS system, and the contract is sealed. This means that the subject clauses have just been removed and that there is a solid agreement in place for the purchase of the home. The date when money changes hands (completion) and possession are probably at least a few weeks away yet, but the deal is done.
Sold Subject: This means that an offer has been negotiated and accepted between a Buyer and the Seller. The Buyer is in the process of working through the subject clauses. Statistically speaking, there’s a roughly 9 in 10 chance that the deal will go through. If not, that deal will be taken apart after a few signatures that show that it was taken apart according to terms laid out in the contract and that both parties agreee to this. Once that is done the place is open to offers as before. That said, just because there is an accepted offer on a property doesn’t mean that another offer, which we call a “backup offer”, can’t be negotiated. The backup offer is negotiated and is subject to the collapse of the first offer.
A variation of sold subject worth noting is when is has a time clause. This is something that usually scares other Buyers away from the idea of writing an offer but I don’t think it should. When an offer has a time clause it means that the offer is subject to the sale of their existing property. That is, they need to sell what they have in order to afford what they want to buy and there are certain parameters for that in the contract. Those parameters being that they have a certain amount of time to have an unconditional/subject free sale on the property (usually a month or two) and that if any other offers are accepted from other buyers that they will be given a certain amount of time to sell the property or otherwise come up with the funding. That amount of notice they are given is really short. Usually 24 to 72 hours which basically means that if an offer is accepted from another Buyer that their chances of bumping out the first set of Buyers is pretty high.