Don't Assume That There Is Something Wrong with a House That's Back on the Market
Monday Oct 31st, 2022
If a home sale is pending and then the house goes back on the market, people often assume that the prospective buyer backed out after discovering a major problem with the property. That’s not necessarily true. If you see a house that has been relisted, don’t assume that there is something wrong with it. There are several other reasons why a deal can fall through.
A Buyer May Be Unable to Get Financing
Most buyers get preapproved for a mortgage before they start looking for a new home, but preapproval is no guarantee that a buyer will get a loan. If a buyer’s financial circumstances change, a lender may refuse to approve a mortgage application. A job loss, a pay cut, a new car loan, and an increase in credit card debt are all possible reasons why a buyer may be unable to qualify for a mortgage.
A deal can also fall through if a house appraises for less than the agreed-upon sale price. If the loan-to-value ratio is too high, the buyer may not meet the lender’s requirements. In that situation, the buyer can pay the difference in cash, or the seller can reduce the price. If neither of those things happens, a potential sale can fall apart.
A Buyer and Seller Might Be Unable to Reach an Agreement on Repairs
Buyers usually have a house inspected before they move ahead with a purchase. It’s common for a home inspector to identify a long list of defects, which can range from minor to major.
A buyer can ask the seller to repair any serious problems, and the seller can agree or refuse. If the seller can’t afford to make repairs now or doesn’t want to go through a hassle and delay the transaction, the seller can offer a repair credit.
Sometimes a buyer requests a long list of repairs or a large credit that the seller considers unreasonable. If the two sides can’t reach an agreement, the deal can fall through, and the house can go back on the market.
A Deal Can Fall Apart Because of a Contingency
Often, a potential buyer wants to sell a property before purchasing a new one to avoid getting stuck with two mortgage payments at the same time. A buyer in that situation might include a contingency in the contract that states that the deal will only move forward if the buyer’s current home is sold by a specific date. If that doesn’t happen, the house that the buyer wanted to purchase can get relisted.
A Buyer Might Have a Change of Heart
Sometimes a buyer makes an offer on one property, then finds another that’s less expensive, that’s in a better location, or that has more bedrooms or a more desirable layout. A sudden change in personal circumstances, such as an illness in the family, can make a buyer decide not to go ahead with a home purchase.