FAQ: "Why is this home back on the market?"
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Transcript by Marianne Knowles, REALTOR
So you see your home that you like, a week later you notice it's back on the market. The first thing that you think of is “something is wrong with the house”. Hi everybody my name is Marianne Knowles with Team Knowles Tampa Bay at Lipply Real Estate and today we're gonna talk about some common reasons why you may see a home come back on the market.
What are the Contingencies?
Now first let me start by saying that every state is different but here in the state of Florida the purchase and sales contract has three contingencies that must be met in order for a loan to be approved.
First is Financing
The first is the financing contingency. In one of my most recent videos, I was talking about some common mistakes that buyers make after they've applied for a loan. It could be things like maybe they made a large purchase, that affected their debt-to-income ratio, or maybe they co-signed alone for somebody. It could be other things like maybe HOA fees are higher than they thought and it's just not feasible for them to pay both a mortgage and an HOA fee. But for financing to fall through, it is common and it does cause the home to go back on the market.
Second is Inspection
The second contingency is the inspection contingency. When you're a buyer you're gonna go under contract and you're gonna hire an inspector and they're going to do a home inspection and any other type of inspection that you want done during your due diligence period. And the job of an inspector is to find fault with the home so they're going to provide a lengthy report of all of their findings and they're gonna bring it to your attention. So as a buyer, you're gonna negotiate with the seller with the help of your agent and sometimes they can't come to an agreement. A lot of times it could affect the loan if it's a heavy ticket item like the roof, plumbing, electrical or A/C . Those four things have to pass what's called a four-point inspection in order for a buyer to obtain a loan. So it could be something as simple as the buyer and seller couldn't come to an agreement and it went back on the market.
Third is Appraisal
The third contingency is the appraisal contingency. This is when an appraiser is going to go in. Here, she is going to look at the comparables in the surrounding areas and neighborhoods, and they're gonna give a fair market value on what the homes appraised at. And sometimes the appraisal comes short of what the actual negotiated price is. In that case, you either ask the seller to drop the price or you the buyer would have to pay the difference out of pocket. Or they would have to come to some other sort of an agreement. And there are times when buyer and seller just can't come to an agreement and the deal falls through. Sometimes there are times when the buyer just gets cold feet, it happens all the time especially if the market is hot and they need to make a hasty decision and submit an offer because they want to beat somebody else from submitting an offer. They may just change their mind over time and realize that it wasn't the place or the house after all.
So, it's very common for a home to go back on the market. It doesn't necessarily mean that something is wrong with it. But I do understand it's the first thing that we're going to think of. But there's so much more that could affect a home going back on the market but these are the most common things.
Please know I'm always happy to help if you have any questions just reach out and we'll chat. Take care.