Why Do Homes Come “Back on Market” in Real Estate?
“Back on Market” is a type of property status for a home that went under contract but the deal fell through, so the home came back onto the market. When this happens a lot of home buyers want to know why. Sometimes it’s a red flag that there is something wrong with the house or price. While other times it’s for absolutely no reason at all, literally the home could be close to perfect, but still come back onto the market. So what are the most common reasons why a home will “back on market?” Let’s take a look at the 4 most popular reasons.
The Sky is Gray
Some real estate contracts give buyers the option to cancel the contract for ANY reason within a certain time period. Now, most homebuyers don’t submit an offer on a home with the intention of canceling the contract if their offer is accepted, but it does happen. Maybe they had buyer’s remorse or they found a property they liked more and wanted to pursue it. Or maybe their circumstances changed and buying a home was no longer a possibility.
It’s also not uncommon for homebuyers to cancel a contract if they are purchasing a short-sale or bank-owned home. Sometimes the short sale process can be challenging, it can take longer than anticipated and the buyer can no longer wait or want to wait. The same holds true for bank-owned homes, unlike dealing directly with a seller, dealing with the bank can be challenging.
Whatever the reason may be it doesn’t matter if the sky is gray, blue, or hot pink. If the contract allows the buyer to cancel the contract for any reason, then they can cancel for any reason and the home will come back on market at no fault of the seller.
No matter how old a home is the home inspector will always find something wrong, even on newly constructed homes. Sometimes the items an inspector finds are visible or previously disclosed by the seller, so they were expected. But other times the inspector’s findings are a surprise to all parties, including the seller.
When unforeseen issues come up, especially costly ones, some sellers are willing to fix the items, reduce the contracted price, or give the buyer a credit to keep the deal together. However, occasionally some buyers will cancel the contract no matter what the seller is willing to do. So it’s possible a house will come back on market after the inspection.Homes come back on market for several reasons. Sometimes it might be a red flag while other times it could be nothing. Find out the 4 reasons now! #homebuying #homeselling
Home Didn’t Appraise
Homes appraising less than the contracted price does happen and when it does a few things can happen. The seller can reduce the contracted price to the appraised price. The buyer can come up with additional funds to make up the appraisal shortfall. The buyer and seller can meet somewhere in the middle. Lastly, the buyer may be able to cancel the contract depending on the terms both parties agreed to. In this instance, when a deal can’t be salvaged due to a low appraisal the home will come “back on market.”
The days of every buyer being able to get a loan are long gone. Typically if a buyer is pre-approved for a loan in today’s market it is unlikely they will get denied, but it can happen. Maybe the loan officer didn’t thoroughly pre-approve them. Maybe the buyer withheld important information. Or maybe something came up while under contract, like job loss, which produced loan denial.
When a buyer is denied for one loan program it is possible they may qualify for another one or can try obtaining a mortgage through another lender. However, when the buyer still can’t qualify or doesn’t want to try other avenues they won’t be able to purchase the home and it will come “back on market.” In this situation, there is nothing the seller could have done differently to keep the transaction together.
There are several reasons why a home will come “back on market” and some of these reasons have nothing to do with the house itself. So just because a home comes back on the market doesn’t mean a buyer should rule it out.
I have sold countless homes that came back onto the market and they were all great homes. One home sale in particular the previous buyer had an unlicensed and inexperienced friend perform the home inspection. He can back with a list of “issues” and the buyers canceled the contract. The listing agent disclosed the issues to us prior to viewing the home but we looked anyway. Well, it turns out the “friend” who did the inspection was completely wrong and my clients got an incredible house at a phenomenal price because other buyers ruled the house out based the “issues” disclosed by the listing agent.
So once again buyers should never rule a home out because it came “back on market.” While their real estate agent can try to find out why it came back on market if the home checks a majority of their boxes they should see for themselves. Then make a decision whether or not they want to move forward.
If you think this article, Why Do Homes Come “Back on Market” in Real Estate?, was an interesting read please give it a share!Homes come back on market for several reasons. Sometimes it might be a red flag while other times it could be nothing. Find out the 4 reasons now! #homebuying #homeselling
Popular Real Estate Questions
Why would a house go from pending to active? There are a few reasons why a home will come back onto the market, there could have been an inspection issue, maybe the home doesn’t appraise or maybe it was because the buyer changed their mind or couldn’t obtain financing.
Why do houses stay pending for so long? When a home is “pending” in the MLS it typically means all of the contingencies are cleared and the buyer and seller are just waiting to close. So a house can stay pending for a long period of time because the buyer or seller wanted an extended closing.
Why would a house go on and off the market? If a house goes on and off the market multiple times it could be for the same reason, such as a bad inspection or low appraisal. However, it could also be because of different reasons, like the buyer’s financing falling through or because they simply changed their mind about purchasing the property.
Do home buyers have to get a home inspection? No, buyers are not required to get a home inspection but it is highly recommended. Even if they waived their inspection period it’s still advisable to have an inspection. This way they are aware of any safety hazards, potential issues, and/or repairs that may need to be made immediately or in the near future.
What are the steps to buying a home? There are many steps to buying a home and a top Realtor will be able to guide a buyer through the entire process from start to finish. So first and foremost, a buyer should hire a Realtor, one with experience and knowledge.
What happens if a buyer cancels a real estate contract? What happens when a buyer cancels a real estate contract depends on the terms of the contract itself. In some states, if a buyer cancels a contract within their contingency periods they may get their entire escrow deposit back. However, if a buyer cancels the contract and contingency periods have passed the seller may have the ability to keep their entire escrow deposit and potentially sue them for performance. Once again what will actually happen depends on the terms of the contract both parties agreed to.
About the Author
Top Wellington Realtor, Michelle Gibson, wrote: “Why Do Homes Come “Back on Market” in Real Estate?”
Michelle has been specializing in residential real estate since 2001 throughout Wellington Florida and the surrounding area. Whether you’re looking to buy, sell, or rent she will guide you through the entire real estate transaction. If you’re ready to put Michelle’s knowledge and expertise to work for you call or e-mail her today.