Ninety-one percent of closed sales in August contained a sales contingency, allowing a buyer or seller to back out of the contract if certain conditions were not met. This percentage was reported in the August 2017 REALTORS® Confidence Index Survey, a monthly survey sent to more than 50,000 real estate practitioners.
Read the full report: August 2017 REALTORS® Confidence Index Survey
The most common contract contingencies in August were related to passing home inspections (19 percent); the buyer obtaining financing (19 percent); and appraisal contingencies (15 percent).
“These contingencies are reflective of the risks buyers face when purchasing a home and are meant to protect buyers against these uncontrollable, but anticipated, risks,” Scholastica Cororaton, a research economist for the National Association of REALTORS®, notes on the Economists’ Outlook blog.
Appraisal contingencies are growing more common as home prices appreciate at quick speeds in many markets. In some hot markets, buyers are bidding up prices due to the steep competition but the appraisals are then coming in lower than the agreed-upon sales price.
Source: “91 Percent of Closed Sales in August 2017 had Contract Settlement Contingencies,” National Association of REALTORS® Economists’ Outlook blog (Sept. 29, 2017)