Finding a buyer is one thing. Keeping one may be more difficult.
Home buyers in Chicago pulled out of 16.7 percent of pending contracts last month, Crain’s reported, citing a Redfin report. That’s up from between 13 and 14 percent in the past five months.
Compass’ Nathan Binkley (LinkedIn)
Compass agent Nathan Binkley, based in the West Loop, said he and his business partner have had seven of 46 buyers cancel contracts this year, a rate of about 15 percent. Binkley had just one of 48 pull out in the same period last year.
“Ten years in residential (real estate) in the city and I’ve never seen buyers be this flaky,” Binkley told the outlet. “Buyers are entering contracts and then finding the smallest reason to terminate them.”
An overheated market might be partially to blame for the increase, said Jordan Chalmers, an agent at Baird & Warner.
“They may have felt rushed into making a choice,” Chalmers told the publication. “And when they get a chance to sleep on it, they realize they got caught up in the hoopla and the house isn’t worth that price to them.”
Redfin’s report found that the quickly rising interest rates could also be contributing.
“If rates were at 5 percent when you made an offer but reached 5.8 percent by the time the deal was set to close, you may no longer be able to afford that home or you may no longer qualify for a loan,” Redfin economist Taylor Marr said in the report.
Binkley had one buyer pull out of a $1.1 million Bucktown house when the inspection found “totally normal” issues. Another buyer who had been looking for a condo for his college-age daughter backed out of a deal because rising infections in the city meant her school might again cancel in-person classes.
Chicago’s cancellation rate is higher than the 14.9 percent national average, according to the Redfin report. Areas with the highest rates are Las Vegas with 27 percent, Phoenix at 24.5 percent and Tampa at 23 percent.
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— Victoria Pruitt