Spending months to find the perfect home in your price range, only to have your mortgage application rejected, or a home inspection turn up expensive repairs, is a nightmare — one that is coming true with increasing frequency, according to a new report from real estate listings website Trulia.
An analysis of listings by San Francisco-based Trulia, an online real estate site, shows that 3.9 percent of homes that moved from for-sale to pending moved back to for-sale again, nearly double the rate in 2015. Such “failed sales” increased in 96 of the 100 biggest U.S. metro areas, with big swings in areas large and small, rich and poor.
In Ventura County, Calif., where the median home value is $548,000, 11.6 percent of prospective sales failed to close in 2016. That’s the highest in the United States, up from 3.1 percent in 2015. Tucson, Ariz., where the median home price is $176,000, had the second-highest rate of failed sales, at 10.8 percent, up from 3.5 percent the year before.
Trulia’s data don’t explain why listings reverted from pending to for-sale, but broadly speaking, a few factors can reliably torpedo a deal:
l The buyer’s mortgage doesn’t come through.
l A home appraiser values the home below the sales price.
l Defects discovered in home inspections give reason to walk away to a buyer.
As to why these things might be throwing a wrench into more sales than before, Felipe Chacón, a data analyst at Trulia, said inventory shortages in many U.S. markets have been most acute for the entry-level homes first-time buyers usually seek.