Real estate is an occupation that’s filled with complex lingo. If you work in the world of real estate or have a passion for this industry, you may have heard the phrase BOM, meaning back on market.
But what does BOM (back on market) mean in real estate? Continue reading to find out the answers!
- What Does BOM (Back On Market) Mean In Real Estate?
- Why Are Properties Put Back On The Market?
- Does A BOM House Have Problems?
- Will BOM Impact Sale Price?
- Frequently Asked Questions
- Final Thoughts
What Does BOM (Back On Market) Mean In Real Estate?
BOM is often bad news. Standing for “back on market”, this term describes a building that has gone back on the property market because a sale has fallen through.
This is usually disappointing, as it means that a potential sale has not been completed. Instead, real estate agents will have to search for a different buyer. Buyers can back out of this sale for a range of different reasons, even if they’ve gotten far into the buying process.
BOM means that the seller is willing to search for a different buyer. As you can imagine, this can take a lot of time and effort to find a suitable buyer.
Why Are Properties Put Back On The Market?
As mentioned, properties can be returned to the market for lots of different reasons. It doesn’t automatically mean that there’s anything intrinsically wrong with the property.
So to put your mind at rest, here are some of the main reasons why a property may be put back on the market:
The Buyer Had A Change Of Heart
Searching for the perfect property can be tough work. It’s a massive decision that can impact the rest of your life. As a consequence, it’s natural that buyers will sometimes get cold feet about a property.
They may have come across a property that’s better suited to their needs. Alternatively, they may simply have become nervous about purchasing this property.
Buyers who have not yet signed a contract can easily ditch a property. But if a contract has been signed, things can be a little more complicated. Buyers may have to pay a penalty to relieve themselves of this contractual obligation.
Regardless, a property returning to the market can be as simple as a buyer changing their mind.
An appraisal refers to a financial valuation of a property. This evaluation is conducted to find out how much a property is worth.
The appraisal contingency is contained in most real estate contracts. If a property is found to be lower than the appraisal price, this contingency allows buyers to abandon a property sale.
After this, sellers can put their property back on the market for a price that’s better suited to the appraisal.
Inspections are regularly conducted on homes that have newly entered the market. It’s a good idea to have an inspection carried out before buying a property. This is because the inspection will reveal any potential problems with the home.
Luckily, real estate contracts have been devised so that buyers can abandon their pursuit of a home if it fails the inspection. This is known as the Inspection Contingency.
When a home fails this inspection, it can be returned to the market. Yet, this problem must always be disclosed. Ideally, the homeowner will fix this issue. Otherwise, it could make the property less desirable.
Buying a house costs a lot of money. Research has found that the median price for a home in the United States costs $320,000. As you can imagine, this is a lot of money to spend on a property.
Thanks to this large investment, it’s inevitable that financial problems can sometimes occur. For example, the buyer may be rejected for a loan. This can even occur if they have been pre-approved, as loans can be fairly fickle.
When these financial problems arise, sellers will likely return the property to the market so that they can find a different buyer.
Does A BOM House Have Problems?
You might assume that a home that’s been returned to the market is overflowing with problems. Why else would it have been rejected by an interested buyer?
But as you can see from the aforementioned reasons, this is not necessarily the case. There are numerous reasons why a property will go back onto the market, many of which will not be the fault of the seller.
So you don’t need to worry about there being something wrong with a property if it’s been returned to the market. If you are concerned, it’s best to ask the seller or estate agent to clarify why the house was returned for sale.
Not to mention, seller documents should disclose clearly why this occurred. In the majority of cases, the seller will not be responsible for this.
However, if a house has been put back on the market because of a failed inspection, this will indicate that the house has a problem. You should double-check that this issue has been resolved before buying the house.
Will BOM Impact Sale Price?
If you’re selling your house, you may be concerned about BOM having a detrimental effect on your home’s value. The sad truth is that this can sometimes negatively affect the value.
This is because the property will look bad if it has been on the market for a long time. Buyers will begin wondering if there is a reason why this house has not been sold. Consequently, they may try to make lower offers.
Sadly, some buyers will accept these lower options simply because they want the property taken off the market.
Therefore, it’s best to avoid getting your house put back on the market, though this is not always possible. After all, buyers can hardly predict that financial problems will occur.
Frequently Asked Questions
How Can You Make Your Property More Desirable?
If your home has been on the market for a long time, this could indicate that it needs sprucing up. Luckily, there are a few different strategies that you can use to make your home more appealing to buyers:
- Declutter your home by removing unnecessary objects.
- Ensure that your home is clean and tidy.
- Use air fresheners or candles to give your home a subtle yet pleasant scent.
- If your walls are looking drab and tired, give them a fresh coat of paint.
- Conduct any essential repair work that your home needs.
- Light a fire to create a warm and welcoming space. This is particularly effective when the weather is chilly during fall and winter.
How Long Do Houses Stay On The Market?
There’s no set amount of time in which your property will stay on the market. On average, homes tend to stay on the market for between 2 and 3 months.
However, this differs dramatically. If you’re lucky, your property could receive an offer within days. On the flip side, it can take numerous months to sell a property.
BOM (back on market) is a useful tool to learn whether you are buying or selling a property. Hopefully, this guide will have told you everything that you need to know about this phrase.
So if your house is put back on the market, you may be a little disappointed. But the good news is that you can still have a brilliant buyer!
Paul Martinez is the founder of BendingDestiny.com. He is an expert in the areas of finance, real estate, and eCommerce.
Join him on BendingDestiny.com to learn how to improve your financial life and excel in these areas. Before starting this blog, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.