One of the growing trends in our hot San Francisco market seems to be the “back on market” status. This happens when a buyer needs to cancel the contract, and the seller has to go back on the market in search of a new buyer.
I’ve started noticing recently that a handful of properties seem to come back on the market daily. The numbers are certainly not staggering; of the 285 houses currently listed, only seven came back on the market. And only six of the 247 available condos fell out of contract. The reasons behind the fallout are typically due to financing, though I have come across buyers backing out for personal reasons. And I’m sure there are instances where inspection results didn’t sit well with the buyers.
But let’s get back to the “personal” reasons. I think these can stem largely from buyers feeling rushed to make decisions in order to meet offer deadlines; in many cases, the deadlines are set for within a few days of the first open house. There is a lot of information to get through when you’re considering writing an offer, and I have to believe that not everyone can be as thorough as they’d like when given a day or so to get through all the decision points involved. (For example, I noted that the condo at 226 Ashbury (see photo) went pending after about five days on the market. Two days after that, the property came back on the market. I don’t know the official reason behind the backout, but a fallout after only two days in contract typically involves second thoughts and a contract cancellation.)
As such, I’m guessing that we’ll see an upswing in the back-on-market rate as 2013 marches on. Remember, buyers: It’s highly recommended that you review all disclosures and comps before writing your offer. Consulting your lender on an ongoing basis (vs popping up peridically when you want to write an offer) is a great way to avoid last-minute surprises when you finally get into contract. And ideally, you’ll want to visit the property at least twice to make sure it’s the right fit.