Fall Through Rate

Reblogger Patricia Kennedy
Real Estate Agent with Evers & Company Real Estate, Inc. AB95346

There was a Q&A about this, and the comments brought me to Lyn's really informative post.  And I missed it first time around, so in case you did, too, here is a reblog!

Original content by Lyn Sims

Recently I wrote a post about the fall through rate in our Northwest Suburban area.  We buyer fall through ratedon't have definitive numbers on how many deals actually fall apart in our MLS.  I'd think that would be a good idea but it's just not available to us. Many parts of the country are reporting fall through rates of 30% to 35% from their MLS's in Southern California & the Charlotte, NC areas.

The National Association of Realtors has recently given us a national fall through rate which I decided to focus on for you.

Obviously this is a national survey & shows the main reasons of why a contract does not close.  Many reasons are the buyers but then there are also reasons from the seller.  Sometimes it's a clear surprise to the seller that they have liens on the property or incorrectly released liens.  It all takes time to correct title issues & sometimes it can't be done at all (tax liens).

For agents reporting on their last contract that went into settlement or was terminated over the period August–October 2016, agents indicated that 62% of contracts were settled on time, 32% had delayed settlement, and 7% were terminated.

buyer fall through rate



Having a deal fall through is not really always a bad thing & there could be a variety of reasons. The one that you DON'T WANT to happen is the one where the buyer does not get their financing as promised.

WHAT COULD HAPPEN?

This graph pretty much sums up questions asked by the sellers in most transactions. As much as humanly possible I put out fires & look for loopholes to keep my clients safe & deflect delays. This comes with experience.

buyer fall through rate



WHEN THINGS DO GET DELAYED .....

Among contracts that had a delayed settlement (32%), issues related to obtaining financing, appraisal, and home inspection were the primary causes of the delay.

IS IT TIME TO KILL THE DEAL?

Of the 7% fall through's the number one reason was home inspection issues.  I'm sure it is because the seller refused to repair the problem or possibly the buyer had unrealistic expectations from the outcome of the inspection. Either way an agreement could not be reached & the seller chose to put the property back on the market.

  buyer fall through rate

 

Where have all the buyers gone?

Realtor Confidence Index October 2016

 

lyn sims

 

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Ambassador
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Paul S. Henderson, CRS, REALTOR®,
RE/MAX Professionals. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

That was a great re-blog of a post I obviously missed. Thank you Patricia Kennedy 

Jan 10, 2017 08:14 PM #1
Rainer
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Rose Mary Justice
Elite Realty Group - Dandridge, TN
Elite Realty Group

I like seeing the numbers.  For me I had a few that did not close and I had a few that backed out.    I need to focus on the numbers.

Jan 10, 2017 09:07 PM #2
Rainmaker
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Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Patricia - looks like a very small portion of sales fall through.

Jan 10, 2017 09:25 PM #3
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Paul, I can't believe I missed this one!  Wish they'd collected the data differently, but it's fascinating.

Jan 10, 2017 09:34 PM #4
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Rose Mary, I had a good year for holding them all together, but I had a scary one in 2015 - though it did have a happy ending for my client -  and for me.

Jan 10, 2017 09:35 PM #5
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Grant, I don't remember getting anything from NAR asking for my numbers, so it's a good starting place.

Jan 10, 2017 09:38 PM #6
Rainmaker
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Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Pat,I missed this post as well, good to get a rebound post aka re-blog, in all fairness it is not always the reason the chart shows... often it is inexperienced agents who do not know how to manage the expectations of sellers and buyer... just sayin...Endre

Jan 10, 2017 10:05 PM #7
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Debe Maxwell, CRS
www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

This was a great post to re-blog, Pat!  I do know that our termination numbers are down considerably from spring months.  Needless to say, we're pleased about that!  Happy Wednesday!

Jan 11, 2017 06:32 AM #8
Rainmaker
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Will Hamm
Hamm Homes - Denver, CO
"Where There's a Will, There's a Way!"

Hello Patricia Kennedy,  Great re-blog that I missed the first time around.  Make it a great day!

 

Jan 11, 2017 07:38 AM #9
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Endre, the methodology that NAR used may indeed be a bit flawed.  Still, their results were interesting.

Jan 11, 2017 10:20 AM #10
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Debe, this study doesn't deal with buyers' remorse, which I think is more common in spring when there are more bidding wars - then a few days later the winners wonder what on earth they were thinking!

Jan 11, 2017 10:22 AM #11
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Will, I missed it, too.  And I think it's an intersting post - glad to help get it out there.

Jan 11, 2017 10:23 AM #12
Rainmaker
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Yolanda Cordova-Gilbert
C&G Consulting - Katy, TX
C&G Real Estate Consulting

Pat,

 Great choice for a re-blog and I hope your weather is not too bad! Have a wonderful Wednesday!

Jan 11, 2017 12:01 PM #13
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Sam Shueh
(408) 425-1601 - San Jose, CA
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I don't write offers unless I feel the contract has a reasonable chance to getting accepted.

Jan 11, 2017 07:47 PM #14
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