I was inspired to write this by Deb Brooks' post on Contingency Chain...Very Iffy today, regarding deals that run the risk of not closing. The National Association of Realtors announced that one out of six real estate licensees reports transactions that were canceled before closing in June 2011. This is a pretty significant number of failed closings.
For the past sixteen months, the average cancellaton rate has run between eight and ten.
So what is happening? What's the cause? Was it the debt ceiling crisis that caused a lack of security in the system? Faulty Appraisals? Short Sale buyers who who run out of patience before the lender responds?
Many Realtors reported that consumers are becoming pickier and demanding repairs, even when the contract is clearly "As Is". Garth Jones wrote a post about called When did As Is Stop Meaning "As Is?" where he outlines his frustration on this phenomena. On Bank Owned properties, it can be a deal killer if the buyer demands repairs after their home inspections.
Lenders are adding layers of conditions beyond Fannie Mae and FHA guidelines, which leads to qualified buyers with good jobs and high credit scores being denied or cancelling contracts out of frustration.
So, since we are the statistics being quoted in NAR's reports, what's happening in the trenches? Why are our deals falling apart?
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