One of every six real estate professionals reported in June having signed contracts canceled before closing — which is up from one in 25 the month prior, according to the National Association of REALTORS®.
The average cancellation rate for the past 16 months has been between 8 percent and 10 percent.
Lawrence Yun, NAR’s chief economist of NAR, says possible culprits could be lowball appraisals and tightened mortgage underwriting rules. Some real estate professionals also point to lawmakers’ indecision on the national debt ceiling the last few weeks and an increase in short sales-related cancellations due to buyer frustration at the lengthy process or banks not approving the short sales.
And some real estate professionals say that buyers simply have just gotten more picky.
Home inspections often turn up some problems in homes, but “lately buyers seem to be holding out for perfection,” Jessika Mayer, manager of professional development at Coldwell Banker Plaza Real Estate in Wichita, Kan., told The Real Deal. She says that minor problems surfaced by inspections that buyers once let pass are now derailing deals, with buyers’ increasing demands for replacements, repairs, and price discounts.
Source: “Home Buyer Contracts Falling Apart,” The Real Deal (July 29. 2011)