Roughly 56,000 home purchase agreements were canceled in August, equal to 15.1% of homes that went under contract that month, according to a new data report from Redfin. This is up from 14.3% one year earlier and marked the highest August rate in records dating back to 2017.
Redfin observed that deals often fail during the inspection period, with buyers pulling out if sellers don’t concede to their repair requests or if a better home comes up for sale. Redfin surveyed 443 of its real estate agents last month who experienced deal cancellations in the past three months and found 70.4% said home inspection or repair issues caused deals to fall through, followed by buyer financing falling through (27.8%), the buyer’s inability to sell their current home (21%), a change in the buyer’s financial situation (14.9%), a buyer finding a different property they liked better (12.9%) and concerns about the economic climate (12.2%).
Among the major metro areas, Atlanta recorded 1,532 canceled home purchase agreements in August, equal to 21% of homes that went under contract that month—the highest percentage among the metros in this analysis. Next came Jacksonville (20.5%), Orlando (20.2%), Tampa (19.4%) and Las Vegas (19.4%).
Home purchases were least likely to fall through in New York’s Nassau County (4.5%), San Francisco (5.9%), San Jose (6.9%), Pennsylvania’s Montgomery County (8.8%) and Oakland (9%).
“I had a listing where the buyers requested nearly $15,000 in pool repairs,” said Kevin Alford, a Redfin real estate agent in Oklahoma City. “My sellers went above and beyond, completing the work, paying out of pocket to make sure everything was perfect. But even after the pool was repaired, the buyers failed to close on the scheduled date without notice. The deal ultimately fell through, and it was heartbreaking for the sellers.”
And what about all the Federal Employees that aren’t getting paid right now and into the unforseeable future – who won’t be able to be financed.
I live in Los Angeles. I recently had a deal, fallout over the inspection and because he was having a hard time getting insurance. I don’t know exactly if he just couldn’t get insurance or if the price was so absurdly high. I’m sure it has to do with the 14,000 homes that burned.
This was a first for me in 27 years.