Posted by Tony Mariotti on Wednesday, July 17, 2019 at 10:57 AM By Tony Mariotti / July 17, 2019 Comment
“Bumpable” is a property listing status that is used by an MLS to indicate to other real estate agents and prospective buyers that a seller accepted an offer on their home, but with the condition that the buyer first sells their current home.
One of the biggest MLSs to use the bumpable status is the Regional Multiple Listing Service (RMLS) which covers Southwest Washington and the Portland Metro Area. Other MLSs have a similar property status indicator to reflect the same buyer contingency. For examples, Realtors in Dallas use the MLS status “contingent with kick out.”
If you don't live in an area where your local MLS has a status to indicate this type of contingency, you may come across something very similar, a "bump clause." A clause is not a listing status, is an addendum to a purchase contract.
The notion of bumping – as an MLS status or clause in a contract – is used around the country. Bump clauses and bumpable as an MLS status and can get a bit tricky, so here’s an example illustrate what it means:
Let’s say that you decide to put your home in Vancouver up for sale. A few weeks later, you receive an offer on your home from a prospective buyer, whom we’ll refer to as James. The offer is in line with the price and terms you wanted; thus, you decide to accept it. But, James has an important contingency: he must sell his current home before he can buy your house.
As a seller, you may not want to wait until James sells his house and would like to consider other offers that come down the pike. While you you have a bumpable listing, you are allowed to accept other offers on your home. As a “bumpable listing," James is referred to as a “bumpable buyer.”
A few days after James puts in his offer, a second person – who we’ll call Sarah – decides to put an offer on your home, too. When Sarah puts in her offer, James receives a notification. He then has 24 to 72 hours to remove the contingency that he must first sell his house before he can buy your home. Here are some scenarios that can play out:
- James can cancel his offer on your home.
- You can reject Sarah’s offer and honor James’ original offer, still honoring the contingency that he must first sell his current home.
- You can reject James’ offer and accept Sarah’s offer.
To help put a bumpable status into context, let’s itemize the other RMLS listing statuses.
RMLS Listing Statuses
When a seller hires a real estate agent or broker to sell their property, they will sign a contract giving the agent or broker permission to market their property and the right to a commission for doing so. The agent/broker will then put the property details into the local MLS and set the status to “active” or “ACT” in the database. The new listing will then populate across real estate websites that get a direct data feed from the MLS.
A property is listed as “bumpable” or “BMP” in the MLS if the seller receives an offer from a buyer, but the buyer includes a contingency that they must sell their home before they can close the deal. The seller won’t have to have to wait until the buyer’s home sells (as that can sometimes take several years) and can consider other offers.
You can think of bumpable as a subset of active. Here’s why:
- Technically, while a listing is bumpable, the home is still on the market (active)
- The house comes off the market (and status changed to pending) only when the bumpable addendum (contingency) is lifted.
If a buyer makes a contractual offer on your home without the condition that they must first sell their home - and you accept the offer - your listing’s status will change to “pending.”
Making an offer on a home is a binding commitment and, in most states throughout the U.S., means that the buyer is contractually obligated to purchase the home and the seller cannot execute a contract to sell the home to any other interested buyers. They can, however, collect backup offers from other interested parties if the deal with the original buyer falls through.
There are almost always contingencies that must be met for a property to close. For most transactions, typical contingencies include the home passing an inspection, a home appraisal that is satisfactory to the lender, a title search, and/or an attorney review. All of these contingencies will affect the most common contingency of all, which is the buyer’s ability to qualify for a mortgage or produce adequate financing for the home.
Your listing is marked as "sold" or "SLD" after the contract has closed and the settlement has ended.
Other RMLS Listings Statuses
Of course, there are statuses for properties that don’t sell. You may come across these as well:
When you sign a contract with a real estate agent or broker, you will both agree on a date for the contract to expire. If you reach that expiration date and your home hasn't sold, your listing will be considered "expired" and it will be marked as "EXP" in the database. The status change happens automatically at midnight on the listing's expiration date.
Sometimes, you no longer want to sell your property. Perhaps your moving plans changed, or you decided to hold onto your home a bit longer. You can cancel your listing agent. As soon as your contract is canceled, your listing will be marked as "canceled" or "CAN" in the MLS, and the cancellation date will be noted in the expiration field.
If you don’t want to cancel your contract, but would like to remove your listing from the MLS temporarily, you can withdraw it from the database. During this time, your property will no longer be advertised. When you decide to put it back on the market, it will go back into the MLS with the active status. If the listing reaches the expiration date while it is marked as withdrawn, it will still expire, and a new contract will need to be created and executed.
Bumpable Status FAQ
How will I know if a listing is bumpable?
Agents can see if a home is a bumpable listing because it will show BMP in the property description included in the MLS. Some consumer websites that carry local real estate listings will also show this status with a bumpable indicator.
Where did the term “bumpable” originate?
Prior to using bumpable, the MLS used the term “contingent,” or simply “CON” to describe a bumpable listing because the house was contingent on the buyer selling his or her home prior to purchasing a new one. However, that term began to confuse agents because every real estate transaction is always contingent on a variety of factors such as a home inspection, buyer financing, etc., whether it is bumpable or not.
How does the 'bumpable’ status get removed?
The bumpable status is removed when the buyer is able to purchase your home without selling their current home. This can often be completed through a bridge loan, which is a temporary loan that a buyer can use to purchase a new home while they wait for their current home to sell.
Another way in which the bumpable status is removed is if the buyer's current home sells. After the contingency is removed, the “bumpable” status is removed and the transaction status changes to “pending.”
Lastly, the bumpable status is removed if the contract is canceled or expired.
Is it worth it to take out a bridge loan to remove the bumpable contingency?
A bridge loan is typically more expensive than a home equity loan. Bridge loans are also more challenging to acquire because you must qualify to own two homes. If you do qualify for a bridge loan, they typically impose a significant financial burden as the borrower will be paying two mortgages (if a mortgage is on the owner’s current home) and hefty interest on the bridge loan on top of both mortgages.
However, if your heart is set on a home and you don’t anticipate your home selling in the time allotted, a bridge loan may be a viable option.
Is it worth it to make an offer on a house that is listed as bumpable in the MLS?
Definitely! However, it is important to note that the seller does have the option to turn down your offer and go with someone else. Also, if the first buyer who put in the original offer decides to remove the contingency that they must first sell their current home, the home's listing status will be changed to "pending" in the MLS. Your offer and all other offers on the home are then considered backup offers. However, there is still a chance that the other offers will be turned down and yours will be accepted should the other offers fall through.