What Does ‘Active Offer No Bump’ Mean on a Home Listing?
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Richard Haddad Managing EditorRichard Haddad is the managing editor of HomeLight.com. He works with an experienced content team that oversees the company’s blog featuring in-depth articles about the home buying and selling process, homeownership news, home care and design tips, and related real estate trends. Previously, he served as an editor and content producer for World Company, Gannett, and Western News & Info, where he also served as news director and director of internet operations.
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.
In your search for the perfect home, you may come across listings tagged as “Active Offer No Bump.” But what does Active Offer No Bump mean? Can you still make an offer on a house with this status?
If you do submit an offer, what can you expect in terms of the seller’s response and the overall buying process?
In this post, we explain the bump clause in real estate and why some sellers may choose to label their property as “Active Offer No Bump.” We’ll also share insights on whether it’s worth your time to throw your hat into the “no bump” ring.
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What is a bump clause in real estate?
In residential real estate, a bump clause is a provision in a home sale contract that gives the seller certain rights, particularly when they’ve accepted a contingent offer. A contingent offer means the buyer’s ability to complete the purchase is dependent on specific conditions being met, often related to them selling their current home.
Here’s how it works:
- Flexibility for the seller: The bump clause allows the seller to continue showing the property to other potential buyers.
- A safety net: If the seller receives another offer without contingencies, they can “bump” the first buyer, giving them a set time frame to remove their contingencies or step back.
- Timelines matter: The original buyer has a deadline, usually ranging from 24 to 72 hours, to make their offer non-contingent or risk losing the property.
This clause is designed to minimize the risk for sellers, ensuring they aren’t entirely locked into a deal that might fall through due to the buyer’s contingencies. Understanding this clause is crucial, as it affects both buyers’ and sellers’ strategies in the property market.
What does ‘Active Offer No Bump’ mean?
When you encounter a listing with the status “Active Offer No Bump,” it implies a specific situation in the real estate market. Here’s what this term breaks down to:
- Active listing: The property is still on the market and hasn’t been sold yet.
- Offer accepted: The seller has accepted an offer from a buyer but with a catch.
- No bump clause in play: Unlike typical bump clause scenarios, in this case, the seller has agreed not to entertain or accept other offers even if they are higher than the original offer or come without contingencies.
This status is a signal to potential buyers that while the seller has accepted an offer, they are not looking to “bump” this buyer for a new offer, even if it might be more attractive or less conditional.
Active Offer No Bump meaning for buyers and sellers
For buyers, this means that while they can still express interest or even submit an offer, the chances of it being considered over the existing one are slim.
For sellers, this status may seem to convey confidence in the current buyer’s ability to close the deal. However, there can be strategic reasons why a seller may want to keep the home listed as “active” on the multiple listings service (MLS). We’ll review those reasons shortly.
Can I make an offer on an ‘Active Offer No Bump’ house?
Yes, you can still make an offer on a house listed as “Active Offer No Bump,” but there are important considerations to keep in mind:
1. Understand the odds: Your offer will be less likely to be considered, as the seller has already committed to not “bumping” the current offer for another.
2. Stay realistic: Make your offer with the understanding that it might serve more as a backup in case the current deal falls through.
3. Highlight strengths: If you still decide to go forward, ensure your offer is strong, possibly with fewer contingencies, to make it more appealing.
4. Be prepared to wait: The seller might hold onto your offer until the current deal is finalized, meaning there could be a waiting period, or no response at all.
5. Keep looking: While you can make an offer, it’s wise to continue your home search, as the likelihood of the current deal falling through may be low.
When or why might a seller list ‘Active Offer No Bump’?
Sellers may opt for the “Active Offer No Bump” status on their property listings for strategic reasons, each designed to optimize their position and sale outcome. Here are some key motivations:
1. They’re looking for backup offers, just in case: By keeping the listing active, sellers signal their openness to backup offers. This approach can keep other interested buyers in the loop and ready to step in if the original contract doesn’t close, ensuring a safety net for the seller. But this can mean discouragement for hopeful backup buyers.
2. Maintain marketing exposure and momentum: Continuing to show the property keeps the listing active and visible in the market. This strategy can be beneficial in maintaining interest among other potential buyers, especially if the seller is harboring uncertainty about the current offer going through.
3. To add muscle to ongoing or new negotiations: By accepting a satisfactory offer and then implementing a “no bump” clause, sellers can create a stable negotiating environment — both for their current buyer if things change, and potential new buyers if the current offer falls apart.
4. Control over the selling process: This status can give sellers more control. They can avoid the disruption of constant showings and negotiations, focusing on closing with the current buyer while still keeping options open.
5. Leverage in a buyer’s market: In a market where buyers have the upper hand, this strategy can help the seller maintain some leverage by showing continued interest in their property, which might encourage the current buyer to expedite the process.
How should I handle an ‘Active Offer No Bump’ listing?
Approaching a property listed as “Active Offer No Bump” requires a realistic mindset and understanding of the situation. Here are some tips for buyers on how to handle these listings:
1. Evaluate your interest level: Assess how interested you are in the property. If it’s your dream home, it might still be worth pursuing, but if you’re less attached, consider focusing your efforts on other listings that you’re more likely to capture.
2. Submit a strong backup offer: If you decide to proceed anyway, make your offer as attractive as possible. This might include offering a higher price, being flexible with closing dates, or minimizing contingencies.
3. Stay informed about the current deal: Try to learn as much as you can about the status of the current offer, such as any contingencies involved. This information can help you understand your chances and plan accordingly.
4. Be prepared for patience: Understand that the process could take longer than usual. The seller is less likely to engage with your offer until they have more certainty about the current deal.
5. Keep your options open: Continue your property search and be ready to act on other opportunities. Don’t put all your hopes on a property with an “Active Offer No Bump” status.
6. Consult your real estate agent: A knowledgeable agent can provide valuable advice and insights, especially about the likelihood of the current offer falling through and how best to position your offer.
FAQs about bump clauses
Here are some frequently asked questions to help clarify bump clauses:
What is a 72-hour bump clause?: A 72-hour bump clause is a provision in a real estate contract that allows the seller to “bump” an existing offer if they receive a new one without contingencies. The original buyer typically has 72 hours to remove their contingencies and solidify their offer, or they risk being bumped in favor of the new buyer. Other names for this clause include: escape clause, kick out clause, right of first refusal clause, or release clause — all of which can be negotiated to more or less than 72 hours.
Can I bump a contingent offer?: Yes, a contingent offer can be bumped if the sale contract includes a bump clause and the seller receives a more attractive, non-contingent offer. The original buyer will then have a specified period (like 72 hours) to remove their contingencies or their offer might be superseded by the new one.
Is a backup offer binding if the accepted offer falls through?: A backup offer becomes binding only if the original deal falls through and both the seller and the backup buyer agree to proceed with a signed agreement. Until then, it’s essentially a waiting game for the backup buyer, and they are not legally bound to purchase the property unless the primary deal collapses and they choose to move forward.
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