Why do deals fall apart?

As you'll see in the data above, the rate of real estate contracts falling through has been reaching new highs in recent months. What this means is that after a buyer and seller have agreed on initial terms of a transaction, for one reason or another, the deal never ends up closing. There are several reasons why deals fall through, and these are the top reasons from my experience:

1.) Buyers get cold feet. This is the primary reason why a deal falls through. Buying a home is a big decision and it comes with a lot of emotions and stressors. Once someone goes under contract on a home, especially for the first time, they can often become overwhelmed with buyer's remorse as a large financial investment is looming. This happens more often when a buyer wins in multiples. as they may have spent more than intended or given away better terms to the other side. Often, they use an inspection (which can be fine) as a reason to back out.

2.) Financing issues. The sad truth is that many lenders provide invalid pre approval letters to buyer and this happens much more often than people think. A loan officer may not due a full underwrite a buyer's income, credit, or assets. Less likely, an appraisal comes in at a lower value than the purchase price, causing a deal to fall through. When working with a listing agent, make sure they are fully vetting any offers via the loan officer to make sure that proper due diligence has been done beforehand to prevent this unfortunate (and far to common) circumstance.

3.) Inexperienced Agents/For Sale By Owners. When there are newer agents on either side of a transaction, the odds of a deal falling apart skyrocket. There are many things that need to be done, and need to be done correctly and timely, for a deal to not fall apart. When a less seasoned agent is in charge of half of a transaction, they will often skip steps, not understand the inspection process, not communicate with key partners, or not honor the contract. This often can lead to a deal falling apart, but it can usually be saved the agent on the other side is able to assist to keep the deal from falling out of contract.

There are many other pitfalls that cause issues that lead to a deal falling through. Have you had a deal fall through and you'd like to chat and figure out why? I am happy to discuss. And to discuss the ways to keep a deal together (if it makes sense for the deal to go through!)

As always, thank you everyone for the referrals! It's the lifeblood of my business and I am very grateful.

-Pat