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[151949]

The owner of the home next door to us passed away 16 months ago.The estate just put it up for sale 3 months ago - we don't know why the long delay to do that. So it has been empty all this time. So far , over the 3 months it has gone under contract 4 times and 3 times the buyers have backed out of the deal. 

When we had ours for sale buyers backed out during negotiations twice. 

A neighbor down the street has hers up for sale and has had the same experience - she's had people back out of negotiations and back out of the contracts.Her house has been for sale since last October.

I've never heard of this happening to this extent and it just baffles me. If you aren't seriously intending to buy why would you take it this far? These are legal contracts and they are losing their hand money on these deals, though that doesn't go to the homeowners. I wonder who gets that hand money.

[dex]

I don’t have an explanation except that maybe their own home hasn’t sold and they can’t swing two homes..My son has earnest money from the buyer of his home.The deal is supposed to close soon.I hope it goes through without any problems.

[Tigriss]

I think we may be going back to having too many approved for up to such and such limits when they really can't afford it once all the numbers are added to the price of the home.  People forget that there are lots of additional fees and thing to consider, like homeowners insurance cost and hurricane insurance down there and flood insurance, that they aren't taking into account with their monthly home cost.  Oh, and there are also HOA fees to consider.  They are just caught up in the moment.  I think the hand money goes to the agents since they are having to do so much work.  I don't know this, but maybe one of our former agents on here can answer it.

[novamc1]

Can't say for sure due to lack of direct knowledge, but if any of those contracts were contingent on anything such as home inspection, termite inspection, structural/engineering inspection, roof inspection, sale of another home, job relocation,  or loan approval............any one of those can lead to a dead contract or near-final contract.

These types of contingencies  (fully agreed to in advance by the seller) do not lead to loss of the prospective buyer's earnest money deposit.

Even some shady shenanigans do not always result in the buyer losing his deposit.

Very doubtful anyone pocketed the money you are asking about except the purchaser and very occasionally, the seller.  I never made or expected a dime from a failed real estate deal.

In fact, I never expected to get a dime from ANY real estate transaction until after all parties (including me) got together at the closing table and signed all papers and transferred all money owed to everyone.

It can sometimes be a long and rocky road to that closing table and getting all signatures on the final papers.  LOL!

[CJC]

Don't know the circumstances in your neighborhood, but we backed out of our contract to buy a home after the inspection showed too many issues that would need extensive repairs.  Here in FL the buyer has a certain number of days, 30 I believe, to back out of a contract for any reason.  Happens all the time.

[ccassaday]

THEre are so many things that can happen. If the buyer was getting a loan several things can come up.  Asking to much and appraisel didn’t come on good, bad inspection and seller wouldn’t fix or to many things wrong. No preapproval and they couldn’t afford it once they went to bank. Maybe they screwed up and went got got a loan for s car or something else and loan fell through.  If it was during negotiations maybe they just couldn’t come up with a agreement.

We had a house in our old subdivision that was pending twice and both fell through. Finally the third one completly went through escrow. I believe the house was overpriced and the appraisel wouldn’t go through. It was a flip and a very nice house.

[Carmie]

When a real estate transaction falls through, the earnest money is either returned back to the buyer or it is turned over to the seller, minus a small transaction fee the broker charges. All of this depends on what is in the contract.

The  buyer could back out of the deal because after an inspection, there is a problem with the house that was not known or disclosed when it was put on the market, or could be the house appraised too low ( quite popular reason. There are others as well.

[Tigriss]

I think part of the issues is also too many new home avaliable so people are buying them since all is new versus a similar price for an older home.

[novamc1]

@Carmie

You mentioned a transaction fee that could be paid to an agent if a deal falls through.  I've never heard that term explicitly but know what you are referring to.

Agents in the metro area where I worked would look pretty bad if they tried to collect any such thing as a fee for services that did not result in a closed transaction.

Agents do have some implied language in the listing agreement regarding this type of compensation (for marketing costs and effort), but I know of no large real estate brokerage firm or individual agent who would insist on taking  away any money due back to the buyer or the seller.

Not worth the damage to reputational goodwill in the community and not worth pursuing with folks who are probably ranging from disappointed, angry, scared and just hard to deal with.

[tansy]

I backed out of a home purchase due to costly issues revealed on the inspection.  The sellers didn’t want to negotiate on the expenses.  I did not lose any money.