New York Yankee catcher, manager and Hall of Famer Yogi Berra once said, “It ain’t over till it’s over.”
In real estate, that would translate into “It’s ain’t over till you get to the closing table,” or not even then.
Many realty professionals, from agents through lenders and onto attorneys and title agents, have found that to be the case more often than not, as Redfin reports. More than 40,000 pending sales failed to close in December, the firm reported, the most for the month since records began being kept in 2017.
That’s 16.3% of all sales, up from 14.9% a year earlier, that were turned down last month, as buyers got cold feet – and not just because it is winter. The most cancellations were in Atlanta (22.5%), Jacksonville (20.6%) and San Antonio (20.6%); the fewest in Nassau County (3.8%), San Francisco (4.2%), and San Jose (8.9%).
Buyers back out for any number of reasons. But most frequently they do so using the inspection contingency. Even when the primary reason is that they realized the mortgage payments are too expensive, they use an issue with the inspection as their excuse to cancel their contracts.
“Buyers have options and aren’t shy about negotiating to find the right home,” said Alison Williams, a Redfin agent in Sacramento. “Cost is a major barrier right now, so if the seller hasn't fixed maintenance issues or the home is priced too high, the buyer may back out.”
Rising inventory has made many buyers more selective, casting aside the house they intended to buy if they find a better choice. said Chen Zhao, head of economics research at Redfin.
“Home sellers outnumber buyers by a record margin, meaning the buyers who are in the market have options and may walk away if they believe they can find a better or more affordable home.”
