Spending months to find the perfect home or the right buyer for your home, only to have the deal fizzle may feel like the universe is giving you one big middle finger salute. The reality is that you are not alone – an increasing number of deals are falling apart from sea to shining sea.
A 2016 analysis of U.S. listings shows that 3.9% of homes that moved from for-sale to pending and back to for-sale again, nearly double the rate in 2015. Such failed sales increased in 96 of the 100 biggest U.S. metros, with big swings in areas large and small, rich and poor… including Charleston.
Aside from someone on the other side of the deal being a slippery character, here are a few reasons why this is happening:
In a seller’s market, buyers have to compete for homes. Some buyers make impulsive decisions without thinking things through just to win the deal. When a buyer begins to add up the expenses associated with making a home look like their Pinterest board, they may feel they’ve bitten off more than than they can chew resulting in a ruh-roh, hell no! type reaction. Don’t no one want an fugly crib y’all.
The buyer’s mortgage doesn’t come through
This can happen even for buyers who have been prequalified, especially when a buyer has to stretch to outbid rival house hunters in a seller’s market. There comes a time when we all have to fall on our own sword and this is one of them… take the time spent as a hit and move on.
A home appraiser values the home below the sales price
Low appraisals are common in hot markets, where buyers bid up prices beyond what appraisers think homes are worth, in order to win the deal. Navigating the appraisal process has been an issue for buyers since reforms passed in the aftermath of the foreclosure crisis. When prices increase, it can take a little longer for appraisers to agree that that juice is worth the squeeze!
Defects discovered in home inspections give a buyer reason to walk away
There are times when reading an inspection report goes down like a warm shot of gin. A house that needs expensive repairs to fix a cracked foundation or a faulty roof may stop looking like a good value. That helps explain why analysis showed that sales of older homes are more likely to fall through.
If you’re looking for a plausible explanation as to why these issues might be throwing a wrench into more deals falling through than before, we have this to offer you: more first-time home buyers (who often face greater scrutiny from lenders), inventory shortages, inexperienced agents who rushed to get their license when the market rebounded, and really, when you have more sales overall, you’re also going to have more that fail. But as long as you have your trusted Realtor by your side to guide you and protect your best interests, you’ll stay the course until your goal of closing is achieved.