Sale fails are up all over the country, San Francisco included
On Jan 11, a new Trulia study examined the shadowy aspect of real estate sometimes called a “sale-fail,” when for-sale homes that fail to sell initially are placed placed back on the market later. Trulia’s main focus: those listings that return again to market after being listed as “pending” or “active contingent.” The study pulls national data from the 100 largest metro areas and shows this trend up everywhere, even right here at home.
Why sales fail
Generally, sales fail for these common reasons
- Buyer fails to obtain financing after entering contract
- Something comes up in the home inspection that causes buyer or seller to balk over who will pay for/how serious the a repair the issue in question (in SF, that could be foundation problems, roof leaks, termite infestations, or any number of issues)
- Sellers decides they can line up a better offer and tank the deal
- Bank appraisal comes in significantly below asking price; and either seller not willing to lower price or buyer not able to cover the gap out-of-pocket
- Seller simply decides not to sell, or buyer simply decides not to buy
Interesting national results
According to Trulia’s study, data show that deals to sell homes in the US are falling through at a faster rate than they were a year ago. Most at risk of all: agreements for starter homes. “The ‘sale fail’ phenomenon applies most commonly to starter homebuyers nationally, at a rate of 7.1percent of all listings in Q4 2016, up from 2.4 percent in Q4 2014,” says Trulia.