There are 782 different ways a contract can fall through on a property (perhaps that’s a slight exaggeration). When you see something go under contract and then reappear as active, most people want to know what happened. Fair enough. Always ask the listing agent for any insight into what happened, sometimes it’s a long complicated answer that’ll mean something to you, and other times it’ll be something small and stupid and won’t affect your transaction at all if you decide to pursue it. Here are some general reasons MOST contracts fall apart:
- Buyer got cold feet.
- Buyer lost financing. This could mean a bunch of different things: did the buyer lose a job? did the condo/HOA not meet lender guidelines (ie. Commercial or investor ratio)? Did the property not meet FHA or VA criteria?
- Home inspection results. If something big came up and the parties couldn’t agree on a remedy, the buyer may have voided the contract. If something major came up and the buyer walk, now the seller is required to disclose material defects to the next purchaser (ie. something needs to be replaced, roof is leaking) unless they fixed it and it’s no longer an issue (sometimes they’ll tell you why the buyer walked and that it was fixed as a result, depends on the agent).
- Property didn’t appraise. Most contracts with a lender involved (i.e. not cash), will have an appraisal. If the property doesn’t appraise and the parties can’t agree to a remedy, the buyer can void the contract.
- Buyer voided based on the HOA/Condo resale package. Many times people void on the resale package for a variety of reasons, they include renting restrictions, pet restrictions, budget increases (future assessments). That said, a buyer can void for no particular reason based on the resale package, which goes back to the buyer getting cold feet.
So with all of that said, just because a property comes back on the market doesn’t ALWAYS mean something is wrong with it. Sometimes it does, but sometimes it might have just been a case of cold feet. Find out!