Introduction
In the fast-paced world of real estate, property listings are often dynamic. A home that goes under contract today may be available again tomorrow. When a property unexpectedly becomes available after being under contract, it is referred to as “Back on Market” (often abbreviated as BOM).
Understanding what BOM in real estate means and how it impacts buyers and sellers is crucial, whether you’re actively buying, selling, or investing. While many might see a BOM listing as a red flag, it can also represent a hidden opportunity. In this article, we’ll dive deep into what BOM in real estate entails, why it happens, and how buyers and sellers can navigate this situation effectively.
With clear explanations, examples, and practical tips, this comprehensive guide will help you make the most of BOM listings.
What Does Mean of BOM in Real Estate?
BOM stands for Back on Market, which occurs when a property that was under contract or pending sale becomes available again. When a home is initially listed for sale and a buyer makes an offer, that offer may be accepted by the seller, moving the property into the “under contract” phase. However, for various reasons, the deal might fall through, resulting in the property being listed BOM in Real Estate (Back on Market.
In a competitive real estate market, the BOM in Real Estate status can capture the attention of both buyers and agents, signaling that a second chance to purchase the property has arisen.
The Significance of BOM Status
When a property is labeled BOM in real estate, it can mean different things to different parties. For buyers, it’s an opportunity to reconsider a property that was previously off the market. For sellers, it’s a second chance to attract serious buyers. However, it’s essential to understand why a property is back on the market to avoid potential pitfalls.
Why Do Properties Go Back on the Market?
There are many reasons why a property might return to the market after being under contract. Some of these reasons may be concerning, while others are simply part of the normal transaction process. Let’s explore the most common reasons a property becomes BOM in real estate.
Financing Issues
One of the most common reasons properties go Back on Market is due to financing issues. A buyer may have been pre-approved for a mortgage but later failed to secure final loan approval due to changes in income, employment, or credit score. In these cases, the deal may fall through, and the property becomes BOM in Real Estate.
Inspection Contingencies
During the home buying process, buyers often request a home inspection to ensure that the property is in good condition. If major issues such as structural problems, water damage, or HVAC malfunctions are discovered during the inspection, the buyer may back out of the deal if the seller is unwilling or unable to make repairs. This situation often results in a property being listed BOM in real estate.
Appraisal Discrepancies
If the agreed-upon price of the home is higher than the appraised value, the lender may refuse to approve the loan unless the price is lowered or the buyer pays the difference out of pocket. If neither party can agree on a solution, the deal might fall apart, sending the property back on the market.
Buyer Cold Feet
It’s not uncommon for buyers to experience second thoughts after their offer has been accepted. In some cases, buyers may decide to back out of the deal due to personal reasons, a change of heart, or discovering another property they prefer. When this happens, the property will return to BOM status.
Title Issues in BOM in Real Estate
Title problems can also derail real estate transactions. If issues such as liens, ownership disputes, or unpaid taxes arise during the title search, the buyer may decide to back out, leaving the property Back on Market.
Contingency Complications
Many real estate deals come with contingencies, such as the buyer needing to sell their current home before completing the purchase. If the buyer’s home doesn’t sell in time, the deal may fall through, putting the property Back on Market.
How to Handle BOM in Real Estate Listings as a Buyer
While BOM in real estate might seem concerning at first, savvy buyers should view it as an opportunity. These properties often come with valuable insights and may offer a second chance to make an offer on a property that was previously unavailable. However, there are a few important things to consider before jumping in.
Do Your Research BOM in Real Estate
When a property becomes Back on Market, it’s crucial to investigate why the deal fell through. Ask your real estate agent to reach out to the seller’s agent for details. Was it due to financing issues, inspection problems, or the buyer simply changing their mind? Understanding the reason can help you make a more informed decision.
Revisit the Property
If you’re interested in a BOM listing, it’s worth revisiting the property to see if any changes have been made. Sellers may have addressed any issues that caused the previous deal to fall through, such as making repairs after a failed inspection.
Negotiate to Your Advantage
Properties that have fallen out of contract may present an opportunity to negotiate better terms. If the property has been on the market for a long time or has gone Back on Market multiple times, the seller might be more motivated to close the deal quickly, allowing you to negotiate a lower price or ask for additional concessions.
Be Prepared for Speed
A BOM listing often attracts a lot of attention, especially if the property was previously popular. Be prepared to act quickly if you’re interested in making an offer. Having your financing in order and being ready to move fast can give you an advantage over other interested buyers.
How to Handle BOM Listings as a Seller
If your property has gone Back on Market, it’s important to understand how to navigate this situation and re-engage potential buyers. While BOM status can sometimes raise concerns, it’s an opportunity to attract new interest with the right strategy.
Address the Issues
If your property went Back on Market due to issues such as a failed inspection or appraisal discrepancy, it’s essential to address these problems before relisting the property. Making necessary repairs, providing solutions, or adjusting the price can reassure future buyers that the property is in good condition.
Be Transparent
When relisting a property as BOM, it’s a good idea to be transparent about why the deal fell through. By providing clear explanations—whether the buyer had financing issues or the deal fell apart for personal reasons—you can help build trust with new buyers.
Refresh Your Listing
A BOM in real estate situation presents an opportunity to refresh your listing. Consider updating the property description, adding new photos, and emphasizing any improvements or repairs made. A fresh, updated listing can help attract renewed interest and show that the property is ready for serious buyers.
Be Ready for Offers
A BOM listing can generate quick interest, especially if the property was previously in high demand. Make sure you’re prepared for multiple offers and are ready to move quickly when relisting the property. Consider reviewing your original pricing strategy and adjusting it if necessary to attract new offers.
The Pros and Cons of BOM Properties
There are both advantages and disadvantages to buying or selling BOM in real estate. Let’s explore the key pros and cons from both perspectives.
Pros for Buyers
- Second Chance Opportunity: If you missed out on a property during its first listing, BOM gives you another opportunity to make an offer.
- Potential Negotiation Leverage: Buyers may have the upper hand when negotiating on BOM properties, especially if the seller is eager to close the deal after a failed transaction.
- Insights from the Previous Buyer: If the property went Back on Market due to inspection or appraisal issues, you’ll have access to valuable information that can help you make an informed decision.
Cons for Buyers
- Unresolved Issues: In some cases, the property may have significant issues that caused the deal to fall through. It’s essential to investigate thoroughly before proceeding.
- High Competition: A BOM listing can attract multiple buyers, especially in a hot market, leading to increased competition and potentially higher prices.
Pros for Sellers
- Renewed Interest: Relisting a BOM property provides a fresh opportunity to attract serious buyers who may have missed the first listing.
- Potential for Quick Sale: If the property had strong interest before going under contract, the BOM status could generate a flurry of activity, leading to a quick sale.
Cons for Sellers
- Potential Buyer Hesitation: Some buyers may be wary of BOM properties, assuming there is something wrong with the home. Being transparent about the reason for the BOM status is critical to maintaining buyer trust.
- Longer Time on Market: If the property goes Back on Market multiple times, it could raise red flags and increase the time it takes to sell the home.
Step-by-Step Guide for Buyers: How to Approach BOM Listings
If you’re interested in a BOM in real estate listing, follow these steps to ensure a smooth and successful transaction.
Investigate the Reason for BOM Status
Before making an offer, it’s essential to understand why the property went Back on Market. Speak with your agent to gather information from the seller’s side. Was it due to buyer financing, a failed inspection, or another issue? Understanding the cause can help you avoid any unpleasant surprises later on.
Conduct a Thorough Inspection
If the property went Back on Market due to inspection issues, make sure you conduct a thorough inspection of your own. Hire a qualified home inspector to assess the property and provide a detailed report. Pay close attention to any areas of concern raised during the previous buyer’s inspection.
Negotiate Repairs or Concessions
Once you’ve completed the inspection, you may be in a strong position to negotiate repairs or ask for concessions. If the seller is motivated to close the deal, they may be willing to make repairs or lower the price to move the property quickly.
Be Prepared to Act Quickly
BOM listings can attract multiple offers, so it’s important to be prepared to act quickly if you decide to move forward. Have your financing pre-approved, and be ready to submit a strong offer with favorable terms to increase your chances of success.
Step-by-Step Guide for Sellers: How to Relist a BOM Property Successfully
If your property has gone Back on Market, here’s how to relist it effectively and attract new buyers.
Address Any Issues
Before relisting the property, take the time to address any issues that may have caused the previous deal to fall through. This could include making necessary repairs, providing solutions for title issues, or offering a price adjustment to reflect a lower appraisal.
Refresh Your Listing
Update your property listing with new photos, a revised description, and any improvements you’ve made. Highlight the property’s key features and be transparent about why it went Back on Market to ease buyer concerns.
Set a Competitive Price
Review your pricing strategy and adjust it if necessary. If the property was originally priced too high, consider lowering the price to attract new buyers and increase the likelihood of closing a deal quickly.
Be Ready for Offers
Once your property is relisted as BOM, be prepared for quick offers. Work with your real estate agent to evaluate offers as they come in and move forward with a buyer who is financially qualified and ready to close.
FAQs About BOM in Real Estate
1. What does BOM mean in real estate?
BOM stands for Back on Market and refers to a property that was under contract but has become available again for sale.
2. Why do properties go Back on Market?
Properties can go Back on Market for several reasons, including financing issues, inspection problems, appraisal discrepancies, or buyer withdrawal.
3. Should I be concerned about a BOM property?
Not necessarily. Investigating why the property went Back on Market can help you determine if there are any serious issues or if it’s simply a matter of the buyer backing out.
4. Can BOM properties be a good deal for buyers?
Yes, BOM properties can present opportunities to negotiate better terms, especially if the seller is eager to close the deal quickly.
5. What should I do if my property goes Back on Market?
If your property goes Back on Market, address any issues that caused the deal to fall through, refresh your listing, and be transparent with potential buyers.
6. How can I find BOM listings?
Your real estate agent can help you find BOM listings by searching the MLS or keeping an eye on properties that return to the market after being under contract.
7. Are BOM properties harder to sell?
It depends on the reason the property went Back on Market. If the issue has been resolved, it may still attract serious buyers.
8. How can I avoid my property going Back on Market?
Sellers can avoid BOM status by properly vetting buyers, addressing potential issues early on, and being transparent during negotiations.
9. Can I negotiate on a BOM property?
Yes, buyers can often negotiate better terms on a BOM property, especially if the seller is motivated to close quickly.
10. Is BOM common in real estate?
Yes, BOM is a common occurrence in real estate, especially in competitive markets where financing and inspection contingencies can cause deals to fall through.
Conclusion
BOM in real estate can seem like a daunting term, but in reality, it offers both buyers and sellers unique opportunities. For buyers, it’s a chance to make an offer on a previously unavailable property, often with the potential to negotiate better terms. For sellers, it provides an opportunity to address any issues and relist the property with fresh momentum.
Understanding the reasons behind Back on Market properties, along with how to navigate them effectively, will empower you to make better decisions, whether you’re buying or selling. In today’s competitive real estate market, being prepared to handle BOM situations with confidence is a valuable skill.
Ready to take advantage of a BOM opportunity? Use this guide to approach Back on Market listings with clarity and confidence!
