If you browse homes for sale on a regular basis, you may notice a few homes that have gone under contract but then come back up again as “Back on Market.”
Why would a home sale contract fall through?
First, I want to note that each real estate contract is different and has different terms. Each State also has different laws and terminology. The list below comes from terminology, clauses, or addenda we currently have here in Maryland. Our local Greater Baltimore Board of Realtors(R) real estate contract forms have changes regularly, and our contract documents had a very big overhaul in October 2022. Some changes may have occurred since this post.
Second, I want to note that there may be many more reasons a contract can fall through than just the four possible reasons listed below. These four potential reasons are just a few clauses, paragraphs, or addenda that may be in a current Maryland real estate contract that can possibly trigger a termination to a contract of sale.
Third, I want to note that I am not and cannot give advice on contracts, contract negotiations, or details on any particular home sale contract. I am not an attorney and I am not and cannot give legal advice. The four items below are clauses, paragraphs or addenda that may or may not be in a home sale contract in Maryland. If you have legal questions about a contract of sale, you should contact an attorney. Do not take any of the information below as legal advice. Contact an attorney for legal advice.
On to a short list of why a home sale contract could possibly fall through in Maryland:
- Property Inspections. A home sale contract in Maryland may have addenda regarding property inspections. There are a number of different inspections that may be agreed to by a buyer and seller. The addenda may give a buyer a specified amount of time for a buyer to have inspections done on the property and possibly request repairs from a seller. Sometimes a buyer and seller cannot come to an agreement about inspection items, and if during the timeframes laid out in a particular contract, the contract could potentially be canceled.
- Financing Contingencies. If in a contract of sale agreed to by a buyer and a seller, the buyer has a financing contingency, there is a possibility the contract could be canceled if the buyer is unable to attain the agreed financing terms. Each loan, lender, and financing contingency is different.
- Appraisal Issues. If in a contract of sale, the terms have an agreement for an appraisal, (which may possibly be a part of a financing contingency,) the home may be subject to an appraiser coming to the home to evaluate the price and condition, and the appraiser’s written report. If there is an appraisal contingency in a contract, and the house does not appraise for the sales price, or if the condition is not found to be acceptable according to the appraiser, there could possibly be an issue. If a buyer and seller cannot agree on solutions to a potential appraisal issue, then it is possible that the contract could be canceled.
- Home Owners Association or Condo Association Documents. If a home is in a community with a Homeowners Association (HOA) or Condo Association, there may be addenda or clauses in a contract of sale regarding HOA or Condo Association documents. In Maryland, currently, there is a specified amount of time that a buyer has to review specific HOA or Condo documents once they have received them from the seller. During that timeframe, if there is anything in those documents that the buyer takes issue with, it is possible that the contract could be canceled.
There are a number of reasons why a contract of sale on a home could be terminated. Please contact your real estate agent, brokerage, and/or attorney if you have questions about your particular situation.
If you would like help to guide you through selling your Timonium home, please contact me. The home selling process can be very stressful. I would love to be able to help!
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