Contingent Offers Do Fall ThroughA contingent home could be back on the market.
How Likely Does Contingent Real Estate Come Back to The Market
The Chances of a Contingent Home Not Closing
The opportunity to purchase a home these days isn't easy. For the past couple of years, the real estate market has been defined by extremely low housing inventory. With so few homes available to purchase, competition among buyers has been severe.
Many buyers have even been going to extremes by reducing the common contingencies you would find in most real estate contracts. While eliminating contingencies is a common occurrence in many instances it is not always the case.
Some buyers are more level-headed and will insist on having a home inspection. Others are not in the fortunate position of being able to remove a financing contingency. These two contingencies can often be the reason for home sales falling through.
It leads to the question of how often do contingent offers fall apart. It is essential for buyers to understand what contingent means in real estate. When a house is contingent, the odds are pretty good that the sale is not a done deal.
Ask any real estate agent and they will tell you that homes come back on the market frequently. Let's take a more detailed look at why a contingent house could suddenly reappear in the multiple listing service.
Home Inspections Often Lead to Contingent House Being Back on Market
A home inspection is one of the more common reasons why a contingent home will not make it to closing. If you have ever bought a home before, you know how easy it is for a home inspector to spot problems.
For first-time home buyers who are stretched thin with their finances, finding out that the roof needs replacement and the heating system only has a few years left isn't going to be pleasant news.
In many cases, if a seller is not flexible at all with dropping the price or providing a credit a buyer will be forced to pass on the house. In a hot market, the seller might want to take their chances that another buyer is just around the corner who can be more forgiving.
Buyer Financing Can Fall Through
Although far less common for a contingent home to fall through because of financing it can happen. Unfortunately, life can get in the way of some home purchases. There have been times when a buyer will lose their job during the process of trying to purchase.
When something devastating happens like that there is little that can be done to salvage the deal.
A Low Appraisal Could Also Contribute to a Contingent Property Failing to Sell
With the explosion of housing prices in such a small window of time, it is possible for a home not to appraise at the purchase price. When an appraisal does not come in there are a few things that can happen.
The lender will usually want a certain amount of equity in order to grant the loan. In order to keep the loan to value ratio, where it needs to be a buyer, may need to increase their down payment.
Unfortunately, not all buyers have the luxury of having endless supplies of cash. If a buyer does not have the ability to come up with additional funds and a seller is unwilling to drop their price, the house could be headed back to the market.
Home Sale Contingencies Can Be Deal Killers
Although far less common when real estate markets favor home sellers, a home sale contingency can squash a real estate transaction. If a buyer has proposed a sale be contingent on their current home selling and it doesn't, the subject property could be back on the market.
Most real estate agents recommend their clients avoid home sale clauses for this very reason.
If you have been looking for a home to purchase for a while and miss out on your dream home, all may not be lost. It could be possible that the house you love finds its way back onto the market.
When you identify a contingent home you would like to purchase keep an eye out on what happens with it. It would also be advisable to have your buyer's agent speak to the listing agent to be clued in on the possibility of the transaction falling through.
You could also consider a backup offer to be in the first position should it be back for sale again. Never count out a home that has gone contingent as being a done deal. Many contingent house sales never make it to closing.