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Suppose you've been looking for months for a home to buy. The one weekend you're out of town, you miss a new listing that sounded just right. It sold before you even had a chance to see it. Now it's back on the market. You're wondering if you should jump at the opportunity or keep on looking.
A listing that's back on the market can carry a stigma of sorts. Someone who had been serious about buying the property turned it down. This could be a red flag that indicates there's something wrong with the property, but it's not necessarily so.
Most listings that come back on the market do sell again—often for a lower price. In fact, a listing that's back on the market could present a good buying opportunity for an enterprising buyer.
Recently buyers saw a listing they liked just after it came back on the market. The first buyers had agreed to pay considerably more than the list price because they were in competition. After completing inspections, they asked the seller to give a $35,000 concession. The seller said no and put his house back on the market.
The second buyers read all the disclosures and reports on the property, including an engineer's report that the seller ordered after his first deal fell apart. This report eased the buyers' anxiety about the condition of the property.
They made a good offer, but did not offer more than the asking price. Although the listing sold the first time with multiple offers, it failed to attract such significant attention the second time around.
HOUSE HUNTING TIP:
Before getting serious about at a listing that's back on the market, find out why the first transaction fell apart. If it was due to defects that were discovered during the buyers' inspections, ask to see copies of all inspection reports and estimates for repairs.
Most property defects can be repaired. Find out how much the repairs will cost and make an offer at a price that takes the necessary repair work into account. Or ask the seller for a credit to cover some or all of the repairs. After losing one transaction, a seller may be more reasonable in negotiating with subsequent buyers.
Transactions can also fall apart because of a glitch in the seller's financing. Recently a prospective buyer made an offer to buy a property at a price that was at the top of what he could afford. His mortgage broker assured the listing agent that there would be no problem with the buyer's financing. Less than one week into the transaction, the buyer's deposit check bounced and the listing was back on the market—due to no fault of the house.
Occasionally, a buyer loses his job during the purchase transaction. Even though he was qualified when he made the offer, he's no longer able to obtain the mortgage he needs. Again, this has nothing to do with the house; it's simply the seller's back luck.
Buyer's remorse also accounts for some failed transactions. This can happen in multiple offer situations when the winning bidder ends up offering more than he feels comfortable paying. A day or two later when reality sets in, he may wish he hadn't been so ambitious. Rather than try to renegotiate in this situation, buyers often simply withdraw from the contract.
THE CLOSING:
In a hot seller's market, you may find that even a listing that's back on the market will sell again for a price equal to or more than the first sale price. It all depends on supply and demand.
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