Where have all the buyers gone?

By
Real Estate Agent with RE/MAX Suburban - Northwest Suburbs of Chicago
http://actvra.in/4XPj

buyer fall thru rateIs it just me or have you noticed that there seems to be less & less qualified buyers out there in the real estate world?  

Is it just me or have you noticed that more & more fall throughs seem to be happening on your listings?

Is it just me or have you actually found out what the fall through rate even is for your MLS?  Yes, it's true. Some MLS's now tell their membership what percentage of homes are falling apart after going under contract.  I am unfortunately one of the MLS's that do not compile that information.

My thinking is this .... there are just far too many contracts that are falling apart for various reasons that shouldn't be happening.  I would say over the last year that 2 out of 3 contracts do not gel into a deal.  So it seems that if you are like me, you have to sell a home 3 times in order to get the deal done & closed.

That seems ridiculous & an extreme waste of time & manpower.

Are we down to the scraps? Are we scraping the barrel here for any buyer that can fog a mirror?  Sometimes I think so.

A recent deal gone bad has just upended my normal closing procedure.  There was a buyerbuyer fall thrus that 'slipped through the cracks' with a debt ratio of 64%.  

THAT IS NOT A BUYER.

This guy made it through the gauntlet & was finally caught by an underwriter for final approval.  How did this guy make it that far?  This just wasn't a crack that the buyer fell into it was a chasm that somehow he managed to jump & stay in the game for 30+ days.  A 'pretender'.

I'm starting to think that possibly during the loan process we should keep properties on the market & accept back up offers until that final underwriting approval.  

I can't be the only agent that has noticed this terrible trend.

It's just not good business.

close

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Rainmaker
2,845,457
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

NO fall throughs this year and I have buyers but not enough sellers.

Dec 01, 2016 01:11 PM #1
Rainmaker
1,526,197
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Waxhaw/Fort Mill Area Realtor

Hi Lyn... I'm sorry to hear this has been your experience this year. Thankfully, I've not experienced anything like this and no fall-throughs this year. I could use a few more sellers, however.

Dec 01, 2016 02:52 PM #2
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Anna Banana Kruchten
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana!

Wow Lyn that is a crazy high number of  file falling apart.  Really not good when buyers are not well qualified up front. Sorry to hear it's going on in your area.  Fortunately I am not experiencing that  myself  but it could be going on here as well. I'll ask around. And I'm not aware of our MLS putting out this kind of stat - interesting.

Dec 01, 2016 03:11 PM #3
Rainmaker
516,802
Mark Don McInnes, Sandpoint
Sandpoint, ID
North Idaho Real Estate - 208-255.6227

Howdy Lyn,  We are experiencing much the same.  I see it going along far too long before any flags are raised.  30 to 45 days almost to the table to find out we should have had this within the first week?  A big problem but don't know what to do about it on our end except be sure everything we handle is in order.  M

Dec 01, 2016 04:54 PM #4
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Chris Ann Cleland
Long and Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

I've seen more issues with delayed closings than deals falling apart, but all in part to the same issues...not properly qualifying a buyer ahead of time.  It's so ridiculous.

Dec 01, 2016 06:14 PM #5
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Chris Ann Cleland
Long and Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Featured in the group:  BARTENDER, MAKE IT A DOUBLE.

Dec 01, 2016 06:15 PM #6
Rainmaker
58,115
Cody Carmen
Adhi Schools, LLC - Rancho Cucamonga, CA
Market Analysis--Educational Content, Adhi Schools

Definitely frustrating and seems like there isn't much a real estate agent can do to fix the problem. So dependent upon buyers understanding the process and the loan origination process being efficient.

Dec 02, 2016 09:27 AM #7
Rainmaker
2,136,897
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale - Probate Specialist

I am seeing more TFT (transaction fell through) on my MLS. Thankfully, they are not mine. I attribute that to a vetting process. The one time I made an exception to my vetting process ... the buyer could not get the loan.  

Dec 02, 2016 03:26 PM #8
Rainmaker
1,056,440
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Lyn - I am not a real estate agent so I can't comment.  I am wondering if we should examine a few more metrics of those fall throughs  and apply what we learn to moving the sale forward.

Dec 03, 2016 09:42 AM #9
Rainmaker
995,433
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

What I'm seeing in our area, Lyn Sims ... is a recent slow down.  Since about 2 to 3 weeks before the election .. just as a timeframe.  And deals are just harder to put together.  The number of details to be seen to are unbelievable in some files. I've had a couple of clients recently that have pulled last-minute credit bloopers too ... (after repeatedly being told not to charge, etc.) ... so frustrating ...

Gene 

Dec 07, 2016 09:49 AM #10
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Debe Maxwell
www.AtHomesCharlotte.com | The Maxwell House Group - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

I'm seeing the same thing in the Charlotte area, Lyn Sims - YES, it's epidemic and you're so right - someone with that DTIR should NOT make it through the system!  And, I've sold several listings this year 2 or 3 times - that's why I'm so passionate about getting back-up Offers to save the sellers time and money due to the first buyers falling through.  Unqualified buyers are often going through unqualfied lenders, in MHO!

Dec 07, 2016 12:36 PM #11
Rainer
234,636
Lee Marlin
First United Realty of Georgia - Atlanta, GA
ATL Metro 404.384.2274 - Luxury/Divorce/ShortSales

This makes it our responsibility as ReaLTORS to be vigilant during due diligence toremain active in determining if the buyer is truly qualified. We have to work with the other agent to make sure early in the process that they understand that everybody's time, energy, and attention must focus on whether the buyer can get the financing.

Even though the lender may "assure" us that the buyer's loan will pass full underwriting, we need to have a serious conversation about where we are in the lending process.

 

 

Dec 10, 2016 08:45 AM #12
Rainmaker
1,636,719
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

Hi Lyn Sims , We have noticed the trend is more toward the banks, rather than the Mortgage companies. I have even heard that employees are leaving the banks, because of all the confusion there.

Dec 10, 2016 06:42 PM #13
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Jeff Dowler
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Hi Lyn

It's a good question. We see some but I couldn't tell you what percentage of transactions fall through at least once. And some are happening several times. One has to wonder - is it buyers, or is it sellers taking offers that are high but have no prayer of appraising so buyers are walking. No doubt there are a number of possible reasons. And right now it has definitely quieted down some with the holidays.

Jeff

Dec 21, 2016 08:58 PM #14
Rainmaker
250,899
Jack Lewitz
IL Real Estate Specialists - Evanston, IL

I think the one of the problems is TRID and buyers not providing documentation early in the loan process and sellers not being able to rely on pre-qual letters issued by lenders . As lending standards ease up as they most surely will with a new administration in the White House I think it will get worse before it gets better. 

Jan 11, 2017 06:33 AM #15
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Lyn Sims

Schaumburg IL Area Real Estate
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