6 Common Reasons Homes Come Back On The Market
No home seller or agent wants to go from pending to active and back on the market. Buyers and sellers make an agreement on a home and everyone including the agents hope the sale goes according to plan but, unfortunately, that’s not always the case. So, why do pending home sales fall through? There are quite a few issues that can come up leading to a home going back on the market.
Re-listing a home as active again can cause buyers to be concerned that there’s something wrong with the home. That’s a myth and not always the case. As long as your agent can determine what caused a contract to fail homes that come back on the market aren’t something to blacklist during your home search.
Whether you are buying or selling knowing why homes go back on the market is useful so that you can do your best to avoid these situations.
Home Inspection Problems
Problems from the home inspection are the number one reason a home comes back on the market. It’s a home inspector’s job to go through a home and identify problems.
After the home inspection is completed the home buyer may now be aware of some problems with the home and they could be costly. The seller can always negotiate to come to an agreement to have repairs completed, reduce the sale price, or credit the buyer. If an agreement can’t be made between the buyer and the seller the buyer can walk.
Home inspectors can make mistakes occasionally, after all, they are human. However, most of the time they are well trained and in Virginia they have to be licensed so odds are if they find a big issue it’s worth looking into.
There is a way to prevent a house coming back on the market due to home inspection problems. How? Get a pre-listing home inspection before you put your home on the market. Then you’ll know the condition of your home before it hits the market and can address any issues that need to be resolved.
Being prepared for the buyer’s home inspection always works in your favor. Follow these 5 tips for a smooth home inspection.
The Home Didn’t Appraise
If the buyer is obtaining financing and doesn’t waive the appraisal contingency there will without a doubt be an appraisal conducted on the home. An appraiser will analyze properties similar to the subject home and review recent sales in the area. Upgrades, special features, number of beds and baths, lot size, and location are all factors an appraiser will consider.
If the appraisal comes in at lower than the agreed upon price and the buyer and seller cannot come to terms the buyer can walk.
The Buyer’s Financing Was Denied
Buyers can get pre-approved and pre-qualified for a mortgage but, that doesn’t mean their financing is guaranteed. If a buyer loses his or her job they could find that buying a home is no longer an option.
It’s good business for a listing agent to contact a buyer’s lender to ensure they are able to qualify. Doing so doesn’t mean it’s a sure thing though. Some lenders pre-vet buyers better than others. Some buyers make dumb decisions such as taking out another loan during the process home buying process that causes them to no longer be able to buy.
Real estate isn’t exempt from buyers getting cold feet. It can happen for a variety of reasons.
Perhaps they made an emotional decision because there were multiple offers and they got caught up in winning a bidding war. Maybe the home was just so perfectly presented they made an offer before thinking about it financially being a stretch.
Whatever the reason for buyer’s remorse it leaves sellers in a bad spot. Even if a buyer has to forfeit their deposit that still means the seller has to find another buyer. Deposits are in place to discourage this type of behavior.
The higher the deposit the better for the seller. Even with a high deposit that doesn’t mean there’s no chance of the buyer getting cold feet and backing out.
Buyers Could Be Submitting Offers On Multiple Homes
Unless a buyer can afford to buy more than one home at a time they shouldn’t be making offers on multiple homes. However, depending on market conditions there are cases where buyers are working with an incompetent agent who is willing to write offers on multiple homes at one time knowing the buyer can’t buy more than one.
All it takes is two offers being accepted at the same time and there’s a big problem.
Sound far-fetched? It’s not and it happens more frequently when markets are very competitive. It’s not only unfair to sellers and agents it’s just plain deceitful behavior.
To avoid a home going back on the market because the buyer made offers on multiple homes the listing agent should have a conversation with the buyer’s agent. The goal is to get as much information about the buyer’s sincerity in the offer before the seller accepts it.
It doesn’t remove the risk but, it lessens it for the seller. The more that’s known about the buyer’s intentions the better.
Title Issues Are Uncovered On The Home
Title issues can put a halt to a sale quickly. There are a variety of ways these can occur; illegal deeds, unknown easements, forgeries, unreleased previous mortgages, and liens.
As soon as a home is pending the title search should be done promptly. The most common title issue is a lien that is tied to a property. This means that the debt has to be paid before the owner can sell the home. If that can’t be accomplished the sale cannot happen.
Homes come back on the market for a variety of reasons. There are cases when coming back on the market can be avoided and there are others where it can’t be. All parties, agents included should work together to the best of their ability to achieve a successful outcome.