The saddest event in any real estate transaction is when the buyer decides to cancel the contract. When selling a home in California, the buyer will have a “due diligence” or “inspection” period, that typically lasts between 7 and 17 days. Until they sign a document (a contingency release) releasing that inspection contingency, the buyer can cancel the contract for any reason. They don’t have to even specify the reason, and the seller cannot object. It’s unilateral right for the buyer to cancel the contract, and get their earnest money deposit back. This week, I had two contracts get cancelled, boom, boom! Nasty stuff. It happened just as I was listening to a presentation by the chief economist for the California Association of REALTORS, Leslie Appleton-Young. Leslie said that in today’s market, 67% of deals that fall apart do so simply because the buyer changed their mind. They got cold feet, whatever it was. They just decide they want out of the deal. And there’s really nothing the seller can do about it. Yes, it’s sad. Sad for the sellers, who have so much invested into the property and the transaction. Sad for the agents. But it just comes with the territory. In any market, about 15% of transactions will fall apart. But in this market, we are seeing jittery buyers walking away from deals for no particular reason. It’s a sign of the times, and we have no choice but to just keep pushing.
The saddest event in real estate
How do you know when it’s a buyer’s market?
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