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. This means that the buyer 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 there is something wrong with the property, so they will often clarify that distinction.
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.
The Buyer Got Cold Feet
Maybe the buyer found a new home they like better, or they decided that now is 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.
The 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.
The 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.
The 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.
The 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.
A 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.
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