One bad move for any new listing is to go from active "for sale" to pending status, and then suddenly appear back on the market. "Back on market" are three words no agent wants to see attached to a listing.
Unfortunately, it's often the case that buyers and their hired agents are too quick to make assumptions about why a given house ends up back on the market. It's typical for them to decide that there must have been something wrong with the property, such as a glaring maintenance issue found during the home inspection.
When a for-sale home does end up back on the market, this new status typically carries a stigma—one that is sometimes undeserved, but a stigma all the same.
In fact, there are very few instances when buyers consider a home going back on the market to be a good thing. Often, this is only the case when there is very little inventory available, meaning that no or very few homes are for sale. In that case, the home would usually have to be priced a bit below market, show well, and come back on the market as "pending rescission," meaning that the previous prospective buyers signed a legal form stating that they had backed out of the sale.
Let's look at a couple of real-life examples of why a home could be sold one minute and then appear back on the market a short while later.
- When a for-sale home ends up back on the market after a pending sale, it usually carries a stigma—one that is sometimes undeserved.
- This could happen for a few reasons, such as if the buyer submitted multiple offers or was dishonest.
- The buyer might not have been able to obtain financing, or their real estate agent could have made a mistake when helping them submit the offer.
- Some buyers just get cold feet and experience "buyer's remorse." In that case, there's nothing necessarily wrong with the home.
The Buyer Submitted Multiple Offers
Some buyer's agents might encourage buyers who struggle with decisions, and can't agree on which home to buy, to just write offers on all of the likely candidates at the same time. One terrible result of this bad behavior is that a buyer can end up in a contract on more than one home.
The Buyer Is Dishonest
There are many ways that a buyer can try to hoodwink a seller. Posing as a buyer with financial means and submitting an attractive offer to the seller when really they're flat broke is only one of those ways this happens. A records search can turn up evidence of a criminal past, and the seller can promptly cancel the transaction. Unfortunately, the home status changes to back on the market.
The Buyer Cannot Get Financing
Just because a mortgage lender issues a pre-approval letter, that does not mean the buyer is guaranteed to get a loan. In some cases, the loan officer who signs the pre-approval letter has neither checked credit nor verified the buyer's assets. Some buyers do not find out that they cannot get a loan until a few days before closing. By that time, the seller's home has probably been off the market for at least 30 days.
The Buyer's Agent Made a Mistake in the Purchase Offer
Legal documents change all the time in real estate. An agent might be familiar with a form and not notice that certain details have been altered. For example, it happened that a buyer needed a few months to sell a home but wanted to submit a contingent offer for a home in Sacramento. Their agent wrote the contract giving the buyer seven days to sell their home. But that was a mistake that the buyer and the agent did not catch. When the listing agent asked for the contingency removal, the buyer's agent was dumbfounded to discover that they had made such a mistake. It meant that the terms in the purchase contract could not be met, and it was back to the negotiation table.
Sometimes buyers believe they made a bad decision and develop cold feet. They slowly begin to realize that with homeownership come other financial obligations, such as maintaining the home, paying for repairs, and upgrades, and they become frightened of what they perceive to be an unnatural burden. Unfortunately, this realization often happens at an inopportune time, such as during the middle of escrow.
Frequently Asked Questions (FAQs)
What does 'BOM' mean in real estate?
Those in the real estate industry sometimes use the term "BOM" to refer to homes that are "back on the market." Any of the situations discussed above involve a BOM home.
How soon can I put a house back on the market after I buy it?
While it might look suspicious to potential buyers, you can put up your home for sale as soon as you own it. Once the sale is finalized and everyone has signed all the paperwork, then the home is yours to use as you please.