Sunday, July 5, 2009

What Does AWC-I Mean?

AWC means Active With Contingencies, at least in the metro Phoenix real estate market where we work. In plain English:

  1. The seller accepted a buyer's offer,

  2. They're under contract, but

  3. There are contingencies that must be satisfied before the sale can close, and

  4. The seller might accept backup offers.

Some common contingencies, in years past:

  • the buyer has a home that must sell before they can buy a new property

  • the seller instructed his/her Realtor to continue marketing the home, hoping for backup offers

  • the seller accepted a buyer's option offer to buy the home

However, in metro Phoenix today, the most common reason homes show up as AWC-I is that they are short sale homes with an accepted offer that's awaiting bank approval. (edited August 2, 2009: 89% of the properties in the AWC-I status are short sales. If you see a property coded AWC-I there's only a 1 in 10 chance that it's not a short sale.)

How long does it take to wait for short sale approval? Depends on the bank(s) involved with the seller's mortgages. Sometimes the seller's lender approves the deal in only 60 to 90 days; sometimes the seller's lender takes 6 to 9 months to approve the buyer's purchase contract. Sometimes, the seller's lender rejects the purchase contract, or demands different terms (issues a counteroffer).

Can a 2nd buyer offer more money than the 1st buyer, and get the home? (edited with more current info, Spring 2011) This sometimes happened in 2008 and 2009. As of mid-2010 and beyond this almost never happens. Bumping out another buyer is actually a serious breach of contract law and most Realtors will never do it. But banks are the ultimate "deciders" in a short sale situation, and banks frequently don't act as if they feel bound by contract law. So, in theory a 2nd buyer could bump out a 1st buyer, but in day-to-day reality in metro Phoenix, this almost never happens.

Did you know AWC homes show up as Active (for sale) in many national real estate websites? AWC is a hybrid, in-between status that metro Phoenix uses that isn't recognized by a lot of the national websites like Zillow and Trulia. It can be really frustrating for online shoppers to see homes marked Active that are really sold, and just awaiting final approval of the closing.

For more information, try reading some more articles in our Foreclosure category or our Short Sales category.  Ready to search for homes online? We offer the best access to the live MLS data, updated in real-time!  Search only foreclosure homes... search only short sale homes... or search all Phoenix-area homes.  Have additional questions? Contact me by email, phone, Facebook or Twitter and I'll be happy to chat.