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If your home is on the market and went under contract, but the deal fell through, it's devastating. Your plans about moving on can be stymied, your financial plans take a turn, and your hopes about being done with open houses, drive-by's and last minute showings are back on again. It's frustrating.
When a home goes under contract that has been marketed in a local MLS (Multiple Listing Service), it becomes invisible to the buying public once the status has been updated from 'on the market,' to, 'under contract.' While your property may disappear from the general public view, it is still visible to the broker/agent community, who will have access to all the info, data and pictures.
Most agents do not show homes that are currently under contract. Agents assume with pretty rare exception that a home under contract is marching toward a closing, and it's a waste of time to show it to other buyers. There are a few exceptions: properties that a buyer has been keeping an eye on but didn't act quickly enough; property that matches a buyer wish-list near perfectly, etc.
But deals fall through all the time. Income or employment loss, being unable to qualify for a loan at all, or a loan that is affordable due to credit issues; promised gift money that never comes through; a look at HOA (Home Owner's Association) rules and regulations that are undesirable; home inspections that reveal problems, issues or concerns; new information that comes to light about a neighborhood problem…the list of reasons why homes don't close once they are under contract is long.
Don't assume that, "off the market today, on the market tomorrow," is greeted with nonchalance by the broker/agent community. It's not, and here are some things that, right or wrong, most brokers assume:
* The buyer got cold feet: The buyer saw/held/felt/experience something that made them go from buyer to flyer, and decided to back out.
* The inspection revealed problems: Most buyers get inspections during an inspection period. This is the time when a lot of deals fall apart; when buyers decide there are too many problems, or buyers and sellers can't negotiate a compromise about how to handle the issues.
* The HOA has problems: Either financial issues, or the buyer sees all sorts of restriction(s) that they decide are either too lax or too confining for their life and preferences.
So, what do you do when that happens to you? Act immediately by doing these three things:
Be sure you understand what happened: Was it out of your control? Did the buyer lose a job opportunity? Or did you decide that the buyer was too unreasonable in their demands? Knowing exactly what happened and why is the key to the next two steps.
Notify the agent community: Agents and brokerages scour the listings and inventory and know when a property comes BACK on the market…when your home comes back on the market, your agent should update the agent-only notes section of the MLS, the section that every agent reads about each listing, and they should be specific about why the deal failed if it was because of something unrelated to negotiating. Job loss, unable to qualify for a mortgage, funding fell through. Any reason that is NOT a result of a poor inspection or inability to negotiate should be revealed honestly. Otherwise, agent-imaginations run wild.
Price evaluation: If you were lucky enough to get an offer, that's great. You're supposed to; that's why you're selling, isn't it? But if your deal fell apart do to inspection issues and/or an inability to come to a mutual agreement about how to handle issues, chances are, your property had flaws (most do). You need to not only get those issues fixed (they'll just come up again with a future buyer), but realize that when your property goes BACK on the market, with no explanation about why a deal fell through, the agent and public will assume it was inspection issues and expect a price drop. Doing it right away is a key component. Unless your home went under contract on day two with a full-price offer and the inspection was perfect, agents will be wondering why there wasn't a commensurate price drop.
Timing is everything. Homes are little like buying seasonal fruit. Once they have been on the shelf too long at full price, interest drops.
Don't let your home go back on the market with a scarlet letter. Once you go under contract and a deal falls apart, it's almost as detrimental as not ever having a contract at all. Everyone assumes problems, right or wrong. Be proactive, be early and be bold. There is a lot of inventory out there, and without a reason to consider your home once it wasn't right for someone else, buyers (and their agents), will just move on.
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