Yes, we are in a crazy up and down real estate market and what was once a seller’s market has flipped into the hands of the buyers. But what is happening now in many cases should never be considered honest or ethical.
Many realtors and title companies have seen a large increase in contract cancellations and there can be various reasons for this: low appraisal, home inspection issues, no approval of a loan, or even a change of mind by the buyers. However, what has become more prominent lately is simply not acceptable.
It is well known that inventory has increased in most areas where there was once a shortage. At that time there were multiple offers on the homes that were available because there were more buyers than homes. That caused bidding wars and stress on all parties until a solid agreement was reached and a contract accepted.
But now some buyers are playing a game by making an offer on multiple properties and signing contracts on several homes. They know they can cancel for no reason during the home inspection period and this gives them time to make comparisons and then make a final decision as to which home they really want. They then cancel all the other contracts before a home inspection is ordered and paid for. The buyers obviously use different realtors to write up the contracts, keeping agents unaware of what is going on.
This is so unfair and inconsiderate to the seller of the home, the realtors involved, the title company and other buyers! There is a lot of time and energy that goes into writing and preparing a contract and the disclosures needed to keep all parties legal and protected. A seller is counting on the integrity of the buyer(s) to be serious about the purchase of their home and make plans accordingly after a contract is signed. The title company has many steps to take immediately after receiving the contract from the real estate agent. They plan to receive the escrow deposit, collect detailed information from sellers, buyers and realtors involved in the sale. They order a title commitment and other documents that need to be received to assure a timely closing.
Other buyers are at a disadvantage when they might be interested in the same home that is being held up by these multiple offers and are listed as pending. This takes several homes off the market at the same time and allows for less inventory for others to consider.
There will always be “tactics” that some buyers use to get what they want but realtors need to be aware of this type of scheme to protect everyone involved in the sale. With so many “scams” out there today, I would consider this to be one to add to the list. Instead of “buyer beware” I think it is more like “seller beware” in the current market.