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Buyers Are Backing Out of Traditional Home Sales

by | Jul 19, 2022

As the country works to dig itself out of the financial aftermath of COVID-19 and deals with global supply chain and economic crises, many people are finding themselves in an incredibly difficult situation. With so much uncertainty in the air, it’s no wonder that would-be home buyers are choosing to put their plans on hold.

For some, it may be a matter of getting their financial house in order before making such a major purchase. And for many others, it’s simply a case of not wanting to take on such a large debt burden at a time when there is so much economic uncertainty. Whatever the reason, a rising number of people are canceling their home purchase contracts.

A recent CNBC article discussed how the COVID pandemic is causing Americans to cancel deals to buy homes. Higher mortgage rates and surging inflation are leading many potential homebuyers to reconsider their purchases. The average rate on the 30-year fixed mortgage started this year around 3% and began rising steadily from there. It briefly shot above 6% in mid-June before settling at around 5.75%, according to Mortgage News Daily.

Why Are Home Offer Cancelation Rates Are On the Rise?

Higher mortgage rates have also caused some borrowers to no longer qualify for the loans they want. Lenders generally use a front-end debt-to-income ratio of about 28% as the ceiling for home loans. The costs of owning a median-priced home in the second quarter required 31.5% of the average U.S. wage. That’s the highest percentage since 2007 and up from 24% the year before, marking the biggest jump in more than two decades. Buyers are seeing the once red-hot market turn around quickly and dramatically and may no longer see the urgency in putting an offer on a home that they feel might lose value in the coming year. Homebuilders are also seeing higher cancelation rates, with some builders reporting cancelation rates as high as 11.8%.

In this current market climate, selling your home at auction is a much more viable option. Buyers at auction put down a deposit, all properties are sold with no contingencies, and buyers can’t back out of a contract. If you’re considering selling your home, Looper Auction and Realty can put it in front of buyers who are required to put down a deposit and won’t back out on you.

Is Selling My Home at Auction Safer?

The major benefit of selling your home at auction is that buyers are typically required to put down a deposit. This ensures that they are serious about purchasing the property and prevents them from backing out at the last minute. And in a time when mortgage loans for potential buyers are falling through and inflation is making them second-guess their offer to buy your home, selling your home at auction protects you as a seller and ensures that your investment pays off.

When you sell your home at auction, there are no contingencies. This means that the buyer is obligated to buy the property as is, and must put down a sizeable deposit. This is a major advantage for sellers as it eliminates the risk of the sale falling through.

An auction is an excellent way to sell your home quickly and for a fair price. We have a wide pool of buyers who are ready to bid on your property, and our team will handle all the details so you can relax and focus on your next move.

How Can I Sell My Home at Auction?

An auction is an excellent way to sell your home quickly and for a fair price. We have a wide pool of buyers who are ready to bid on your property, and our team will handle all the details so you can relax and focus on your next move. So if you’re considering selling your home, Looper Auction and Realty will put it in front of committed buyers who are ready to bid now. Contact us today to learn more! Just drop your info below and our team will follow up.