So you found a home you liked, but it was snapped up before you could put in your offer (or your bid was rejected), but now that home has come back on the market. Should you jump for joy that you’ve been given another chance? Or should you worry about the reasons the first sale fell through? Here’s what it means when a property status says “Back on Market.”
“Back on Market” is a type of sales indicator status alerting prospective buyers that a home once under contract is now again available to accept offers. This can happen for a few reasons and isn’t always a sign that something is wrong with the house, though it does raise questions that a prospective buyer may want to have answered.
First, Don’t Assume
When a home previously under contract comes back on the market, buyers are usually a bit wary. It’s easy to assume there must have been something wrong with the property — like an issue found during the final home inspection — that caused the sale to fall through before closing. But there are actually a number of reasons that a sale could stall that aren’t the fault of the property at all.
Buyers may not have been able to obtain financing; they may have submitted multiple offers resulting in a contract on more than one home, or they may have simply gotten cold feet and decided not to move forward for some other personal reason.
When a home comes back on the market, you can always ask for previous inspection reports or inquire about the reason why it is returning to sales status. (Just know that unless there is a material defect that was uncovered, there is no legal obligation to provide details for why a home sale fell through.)
But don’t assume that when a house goes back on the market, this means there’s something wrong with the house itself!
Main Reasons a Home Goes Back on the Market
While there is any number of reasons why the terms in the purchase contract could not be met forcing a property to return to sale, there are three main reasons why homes usually go back on the market.
Home Inspection or Appraisal Issues
During the home sales process, buyers usually have a few opportunities at which to back out of the sale. These are usually organized around contingencies like home inspections or appraisals. While a home can go back on the market for a number of reasons, inspection and appraisal issues are the most common.
The buyer has the right to investigate and research the home, and if in that process they discover anything that may change the buyer’s mind, they may decide to back out of the sale.
Also, if the home doesn’t appraise for the contracted value and the parties are unable to agree on a selling price, the deal may end with the finalized appraisal.
A mortgage pre-approval is not a loan guarantee. And financial circumstances can change rapidly. So while a buyer may be qualified or pre-approved to purchase a home when it goes under contract, things can change.
Buyers Just Change Their Minds
There is usually a monetary penalty (like losing the earnest money deposit), but a buyer can back out of a sale for just about any reason in the end. From the silly to the sad — and anything in between — buyers have changed their minds for just about every reason under the sun, and this doesn’t mean you should worry about bidding on a home that, due to their indecision, has returned to the market.
‘Back on the Market’ Can Be a Good Thing
A “Back on Market” status can be considered a good thing for buyers. Not only do they have another chance to purchase the property, but the stigma associated with incomplete sales might mean the home might return priced slightly lower. (This is less likely in today’s market with very little inventory available, though.)
Remember, just because a home comes back on the market does not mean it is undesirable or assume that something must be wrong with the property. As long as you do your due diligence and attempt to verify what caused the original agreement to fail — and see that any necessary issues have been resolved — someone else’s missed closing can be your amazing find.
If you’re interested in a home that’s come back on the market, have LIST WITH ELIZABETH® check in with the listing agent to find out more before helping you to craft your winning offer!