What Is BOM No Fault of Seller?
While it's pretty common to see BOM on real estate websites like Zillow, another related, but less common phrase you may come across is "back on market no fault of seller". BOM no fault of seller means that the sale didn't proceed because of the buyer. For example, the buyer might have not been able to secure financing or they got cold feet and decided to back out.
Agents may not want buyers to think that the deal fell through because the seller is difficult or something is wrong with the property, so they will often clarify that distinction by marking listings back on market no fault of the seller.
Why Would a House Be Put Back on the Market?
- Contracts Were Never Signed
- Buyer Got Cold Feet
- Inspection Contingency
- Appraisal Contingency
- Financing Contingency
- Home Sale Contingency
- Mistake With the MLS or Listing Website
1. Contracts Were Never Signed
Before a purchase agreement is signed, the buyer or seller can back out of the deal for any reason, even if they had a verbal commitment. For example, perhaps the seller briefly took the property off the market because they received an offer. But after attempting to negotiate with the buyer, they realized they'd rather keep looking. At this point, they could put it back on the market and look for a new buyer without any penalty.
2. Buyer Got Cold Feet
Maybe the buyer found a new home they liked better, or they decided that now was not the time to buy due to a sudden life change. They could walk away without penalty if they have yet to sign a contract. But even if they did sign a contract and then got cold feet, the seller could still put the home back on the market while they sort out the legalities.
3. Inspection Contingency
Common clauses in a purchase contract allow buyers to back out of a sale, even after signing on the dotted line. An inspection contingency is one of the most common, which allows the buyer to back out of a sale if the inspection uncovers something unexpected. The seller is still permitted to put the property back on the market, but they must either fix the problem or disclose the issue to prospective homebuyers so the same problem doesn't arise again.
4. Appraisal Contingency
The home appraisal contingency allows a buyer to back out of a sale if an appraisal comes in lower than expected. Ultimately, the seller is not responsible for what the buyer offers to pay, so they may put their home back on the market, even if a prior offer fell through due to a low appraisal. Although, they may want to drop their asking price if it's well above the appraised value.
5. Financing Contingency
The financing contingency allows the buyer to withdraw from a sale if they cannot obtain financing. The underwriting process isn't finalized until after the buyer submits an offer. So, they could still be denied a loan, even if they were already pre-approved. They could be denied due to a low appraisal or something involving their personal finances. Either way, the seller could still put the property back on the market if the buyer backs out due to a financing issue.
6. Home Sale Contingency
If the buyer is trying to sell their old home while they're looking to buy a new residence, they may include a home sale contingency in the purchase contract. This allows them to back out of the sale if they can't find a new buyer, so they won't be stuck paying two mortgages. So, if the buyer backs out of the sale due to the home sale contingency, this would be a clear example of BOM no fault of seller.
7. Mistake With the MLS or Listing Website
Rarely it's also possible that a home is marked as being back on market by mistake. Sites like Zillow, Redfin, and Realtor.com get their data from the multiple listings service, and it's possible for them to mark a listing as BOM incorrectly for a variety of reasons including technical errors, glitches, or even relisting.
Is There Something Wrong With Back on Market Homes?
When a property is listed as BOM, it can sometimes create an impression of potential issues with the property, though it might simply be due to external factors unrelated to the property's condition. Quite frequently a property goes back on the market because the buyer had issues securing financing. Potential buyers should still scrutinize BOM listings closely to understand why the previous deal fell through.
BOM Real Estate Bottom Line
Ultimately, just because a home is being put back on the market doesn't mean anything wrong with the property itself. There are many different reasons that a buyer and seller may decide not to proceed with a sale that may have nothing to do with the home's condition. However, if you notice a home you like is BOM, it may help to find out what happened so you can make an informed offer