Beware of going back on the market (BOM). Some home sales fall through. You're under the gun after you accept an offer. Stay aware of how close you are to actually closing the sale. The majority of home sales close in a timely manner. I think it's smart to prepare yourself that your home sale could fall through.
What does it mean when a house is pending or contingent?
When your real estate listing goes from “active” to “contingent,” it means you’ve accepted an offer, but the sale hasn’t been finalized yet.
While your home is pending, a lot of things happen. Both the buyer and seller are looking to satisfy all contingencies. I usually explain contingencies in this manner, that a contingency is basically a buyer saying IF the inspection comes back good, THEN I will continue forward in purchasing your home.
How often does a pending home sale fall through?
Reasons why pending home sales fall through:
Home inspection contingency
Once a potential home buyer finds a home they love or want, they’ll typically order an inspection of the property to make sure everything is working fine. A home inspection contingency gives buyers an option to renegotiate the price or walk away because of items of concern found in the inspection report.
In seller’s markets where there’s limited housing inventory, bidding wars often raise prices beyond home values. This can lead to trouble with buyers financing when the appraisal report comes back.
A buyer’s lender will only lend up to the appraised amount, so the buyer will have to pay the difference in cash, the seller will have to come down on price, or the buyer can walk away.
Financing falls through
The most common reasons a transaction falls out of escrow is that the buyer’s financing falls through. Typically, if a buyer has been pre-approved, then any negative change in their credit profile may cause the lender to disqualify them for financing. This could be good events as well, for example, a new job.
You should always check a potential buyer’s financials before accepting an offer.
How to keep a pending sale from falling through
Carefully select the safest offer
If you're comparing multiple offers, it’s important to think through the pros and cons of each. Consider going with the offers with the fewest contingencies, and be careful of extremely high offers that might not make it past the appraisal. Choose wisely.
Avoid buyer home sale contingencies
If you accept a buyer home sale contingency, you essentially sit and wait for your potential buyer to close on their current home before they buy your home.
Complete a pre-inspection
You can avoid surprises during the buyer's inspection by completing a pre-inspection before listing. This will allow you to make any important repairs ahead of time and disclose any structural flaws in advance.