Why Houses Come Back on the Market

From common issues found during home inspections to financing problems and contingencies, we will delve into the reasons why previous listings may reemerge on the market.

Additionally, we will discuss the process of relisting a house or land and strategies for marketing it effectively. 

If you’re a homebuyer dealing with a house [in a location you love] that has returned to the market, we’ll provide tips and insights on how to navigate this situation. 

Join us as we shed light on this often misunderstood aspect of real estate transactions.

Commons Reasons Why Homes are Relisted

According to the National Association of Realtors, approximately 10% of all home sales in the U.S. fall through due to a variety of reasons.

Houses can return to the market for several reasons, including failed inspections, financing problems, buyer’s change of heart, or unforeseen circumstances.

Title issues or legal disputes may also cause delays. Buyers should have their buyers agent inquire what the reason was for a specific property being relisted.

Factors that lead to houses being relisted

Financing issues can be a major factor in why houses come back on the market.

A buyer may struggle to secure financing, resulting in the house being relisted. Home Inspection problems can also lead to a house returning to the market.

If issues are discovered during the home inspection, it can cause buyers to back out or renegotiate the price.

Appraisal discrepancies are another common reason. If an appraisal comes in lower than the agreed-upon purchase price, complications can arise, potentially causing the house to be relisted. 

Additionally, contingencies not being met and buyer’s remorse can both result in a house being relisted.

Home inspection issues

During the buyer’s inspection period, which allows them to thoroughly assess the property with the help of a professional inspector, common issues can be discovered that may lead to a house being taken off the market and then relisted.

Structural problems, electrical or plumbing issues, and water damage are among the most common reasons why houses come back on the market.

Once these issues are identified, the buyer has several options, including negotiating repairs with the seller, requesting a price reduction, or even terminating the contract altogether.

If the seller is unwilling or unable to address the necessary repairs or concessions, the house will be relisted for new potential buyers to consider.

Buyer Financing problems

Financing problems can often be the cause of houses coming back on the market. 

• The most common reason for a home to come back on the market is due to a buyer’s financing falling through. This accounts for about 25% of all failed home sales.

It is not uncommon for buyers to face difficulties securing a mortgage or encountering unexpected financial obstacles that prevent them from completing the purchase.

It is possible the buyers have too much debt or interest rates are just too high and cause the lender to back out. 

In some cases, lenders may reject the buyer’s loan application, which ultimately leads to the house being placed back on the market.

Another financing issue that can arise is when a buyer’s pre-approval expires before the closing date, necessitating them to reapply for a loan and potentially causing delays or complications in the process.

Additionally, appraisal problems can occur if the appraised value of the home is lower than the agreed-upon purchase price, making it challenging for buyers to secure a loan for the full amount.

How appraisal issues cause property cancellations

Appraisal issues can impact houses that come back on the market.

 When the appraised value is lower than the agreed-upon purchase price, it can create a problem.

Lenders often require a specific appraisal value to approve a loan. If the appraisal comes in lower than expected, the buyer may negotiate with the seller to lower the price or explore alternative financing options.

Maybe the square footage of the house came in less than what was advertised. This can cause the value of the  condo, townhouse, or home to come in much less. 

If the seller won’t budget on the price, the buyer will have to come up with cash. If not, the buyer will cancel and usually can get their earnest money back.

However, if an agreement cannot be reached, the buyer may choose to terminate the contract, resulting in the house being relisted.

 It’s important to understand that appraisal issues are common and can significantly affect the sale of a house.

Problematic Liens and title issues 

Lien and title issues can have a significant impact on real estate transactions. These issues usually arise when there are unpaid debts or legal claims against the property.

During the due diligence period, buyers may uncover these issues, which can lead them to back out of the sale.

However, once the lien or title issues are resolved, the house can be relisted on the market. The title company will usually discover any issues with encumbrances on the property.

If you are a seller with liens on the property there are homebuyers that pay cash and can close quickly.

The process of putting listings back on the market

To relist a house, certain steps need to be followed. These include updating marketing materials and notifying potential buyers about the relisting.

It’s important to note that a house coming back on the market can impact the selling process and negotiations.

Since the listing agent already has all the photos and details of the property, resisting it is easy.

Strategies for marketing a house that has returned to the market

Certain strategies that can be employed to effectively market it. One of the first steps is to assess the reasons why the house was initially withdrawn and address any issues that led to its reemergence.

It may also be necessary to update the listing and marketing materials to reflect any repairs or improvements made to the property since its initial listing.

Pricing plays a key role in relisting a house, as it may need to be adjusted based on market conditions or feedback from previous potential buyers.

Benefits of Buying a House That Has Come Back on the Market

When a house comes back on the market, homebuyers who were interested, are usually excited but confused.

Understanding why a house may reemerge, such as failed inspections or financing falling through, can help buyers make informed decisions.

Buying a house that has come back on the market can offer several benefits for prospective buyers. 

• It indicates that there may have been a previous buyer who was unable to complete the purchase, which could mean an opportunity for negotiation on the price. Sellers might be more willing to negotiate and accommodate buyers who are interested in a quick and hassle-free transaction.
• A house that has come back on the market gives buyers another chance to consider a property they might have missed out on initially. It allows them to reevaluate their options and potentially make a more informed decision based on any new information or insights.
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Here are a few questions buyers can ask their real estate agent.

How long was the house on the market before it sold

This information can help buyers gauge the level of competition they may face when looking for a new home, while sellers can use it to assess the effectiveness of their listing strategy.

By studying the average days on market for similar properties in the area, you can gain a better understanding of the local real estate market’s dynamics.

If the home was sitting on the market for a longer period, went under contract, and then was re-listed, a buyer may be able to take advantage of an exhausted seller.

What are the most recent comparable sales in the area

By analyzing these recent real estate sales, you can get a good sense of the current market value of properties in your desired neighborhood.

This information is particularly important for sellers who want to price their homes competitively, as it allows them to benchmark against similar houses that have recently sold.

For buyers, studying the recent comparable sales can help them make informed decisions about how much they should offer for a property.

Risks and benefits of buying property that is back on MLS

Purchasing a house that has returned to the market offers homebuyers the opportunity to negotiate favorable terms.

There are various reasons for a house coming back on the market, including issues with financing or failed inspections. Additional due diligence may be required, such as a second inspection or review of previous inspection reports.

However, there are also potential benefits to consider, including the possibility of lower competition from other buyers.

Final Thoughts

Houses coming back on the market can happen for various reasons, including inspection issues, financing problems, and contingencies.

Sometimes it might be Houston home buyers who plan on wholesaling the property but cannot find a buyer in time before the option period expires. 

It’s important for both buyers and sellers to understand the potential risks and benefits associated with these situations.

 If you find yourself in a situation where a house you’re interested in has reemerged on the market, approach it with caution and consider seeking guidance from your real estate agent. 

For more information on how to navigate this process successfully, reach out to our team of agents and brokers who can guide you through the entire homebuying journey.