Anyone who has spent any time looking at homes for sale may have seen properties that are ‘back on the market.’ So what does homes back on the market really mean?
When a home is listed for sale, most homeowners are anxious to see their home sell quickly. Regardless of whether the home goes under contract quickly or takes a month or two, the seller is anxious to get the deal done.
But there are those rare occasions when a home reemerges as ‘back on the market.’ There are several reasons why this may have occurred, and home buyers should know the various scenarios that may have happened. There may be no issues with the house at all; other times, a dispute with home repairs may have voided the contract
It’s good to ask questions when considering this type of listing and know all the possible reasons the home sellers are in this situation. Be aware that homes back on the market may provide a tremendous opportunity to buy or it may be a red flag for potential problems. Make sure to make thoughtful inquiries and pay close attention to pricing in this scenario.
Below you’ll find some of the most common reasons homes go back on the market. Some are unconcerning; others may signal potential problems.
Financing Falls Through
Even though most people are pre-approved for a loan prior to going under contract, it’s not uncommon for home financing to still fall through. Sometimes issues arise during the underwriting process that didn’t emerge during the initial approval. These may be related to income or that the home doesn’t appraise. A loan is contingent on the home appraisal since the lender bases the loan on the home’s value. If the contract price doesn’t jive with the appraisal, the home buyer is on the hook for the difference in price. Unless the buyer is willing to pay out-of-pocket for that appraisal gap, financing can fall through.
Home Inspection Problems
Perhaps the home has some repairs that need to be addressed and the seller wasn’t able to come to an agreement with the buyer on who should pay for what. Typically, stalemates can occur when there is a big ticket item in the mix, like the roof for example. In most cases, an agreement is reached on the percentage paid by the seller (which is usually deducted from the sale price), but sometimes a deal isn’t reached and the contract is voided. Keep in mind, everyone has a different tolerance level for what they are willing to concede when it comes to home repairs. Make sure you have an open mind on any potential inspection issues.
Personal Circumstances Change While Under Contract
Periodically, there are life changes that occur while a house is under contract that cause the deal to fall through. Perhaps the buyer lost his or her job. Or, there has been a major medical event that disrupts the plan to buy. Through no fault of their own, these events may dictate getting out of the contract which can create an opportunity for a new buyer.
Buyer Gets Cold Feet
Many real estate contracts allow the home buyer to get out of a deal pretty easily. In a seller’s market, sometimes people rush into buying a home, sometimes sight unseen, and after several days or weeks, determine that they just don’t want to pursue the purchase. Maybe they have found a different property that suits them better. Perhaps they decide the home is too expensive. Regardless, these scenarios may benefit the buyer who is next in line.
Title Work Has Issues
Part of being under contract includes a title search. Usually this is paid for by the home seller and the process includes researching the property and discovering if there are any liens, mortgages, easements, covenants, etc., on the property. This search and how the encumbrances will be resolved protect the buyer from being responsible for outstanding bills and payments. For example, a title search may show there is a mortgage on the property so it’s necessary to pay off the lender as part of the sale. Or, there may be an outstanding invoice from a contractor that hasn’t been paid. All encumbrances must be taken care of prior to or at the time of closing. It’s not often that title work causes a deal to fall through but it occasionally will happen.
Conclusion
Regardless of the reasons why a home is back on the market, don’t be shy about pursuing a home with this label. Approach the situation with an open mind and a bevy of questions to determine if it will be a good fit for you. You may end up with your dream home!