As I’ve pointed out a few times there has lately been a really large discrepancy between the number of real estate contracts written and the number of closings in Chicago. I was able to confirm that the contracts were certainly outstanding longer than expected but I couldn’t be sure if there were also a higher percentage of contracts just falling apart all together.
Then along came this data from the National Association of Realtors that shows that in fact there has been a huge increase in the number of contract failures at the national level – like twice as many in the last month.
Although this data is at the national level I suspect it’s true for Chicago as well just because of the data I’ve been looking at.
I should point out that the reason the NAR was showing this data in their blog is that they were explaining why buyers and sellers should be using a realtor – because of the propensity for deals to fall apart. The premise is that realtors can keep a deal together when it hits some speed bumps.
Normally I am not a fan of the NAR’s self serving discourse on these matters but this time they are absolutely correct. I’ve seen too many deal hiccups – especially in this market – to think that buyers and sellers can hold a deal together themselves. According to the NAR problems include “declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses.”
And it’s not just these “normal” transaction hiccups that throw up roadblocks. Buyers and sellers have their own sets of issues that sometimes require some objective third party…ahem…”counseling”.