The Most Common Reasons Home Sales Fall Through

Few things are more disappointing than a home sale falling apart at the last minute. For buyers and sellers, understanding why these deals collapse can help prevent surprises, reduce stress, and keep the transaction moving forward smoothly.

Here are the most common reasons home sales fall through — and what you can do to avoid them.

1. Financing Falls Through

Mortgage denial is one of the biggest deal-breakers.

Why it happens:

• changes in the buyer’s credit score

• job loss or income changes

• new debt (like a car loan or credit card increase)

• the lender’s underwriting issues

• appraisal comes in lower than expected

How to prevent it:

• avoid major purchases before closing

• keep credit stable

• get pre-approved, not just pre-qualified

• communicate often with your lender

2. Home Inspection Problems

Inspection issues are another top reason deals collapse.

Common red flags:

• roof damage

• foundation issues

• mold or water damage

• outdated electrical or plumbing

• HVAC or structural concerns

If repairs seem too expensive or risky, buyers may walk away.

Prevention tips:

• sellers can get a pre-listing inspection

• address major repairs ahead of time

• negotiate repair credits instead of fixes

• communicate openly about known issues

3. Low Appraisal

If the appraisal comes in below the contract price, lenders won’t finance the difference.

What can happen:

• the buyer pays the difference (not always feasible)

• seller reduces the price

• both meet in the middle

• contract is canceled

Appraisals often derail deals in hot markets with rising prices.

4. Title Issues

Title problems must be resolved before closing.

Common issues:

• unpaid liens

• unclear ownership

• boundary disputes

• unresolved legal claims

Title companies typically catch these early, but some issues take time (or money) to fix.

5. Contingency Deadlines Missed

Real estate contracts include timing requirements for:

• inspections

• financing

• appraisals

• buyer home sale contingency

Missing a deadline can lead to cancellation or contract voiding.

6. Buyer’s Remorse (“Cold Feet”)

Buying a home is emotional — and overwhelming.Some buyers panic when:

• realizing long-term financial commitments

• finding a different home they prefer

• feeling unsure about location, neighborhood, or layout

Motivation matters. Serious buyers rarely walk, but uncertain ones might.

7. Problems With the Buyer’s Current Home Sale

For buyers who need to sell their current home first, delays or complications can affect the new purchase.

Examples:

• their buyer backs out

• their home appraises low

• inspection issues arise

• slow closings cause timing conflicts

This ripple effect can cause the entire deal to fall apart.

8. HOA or Community Restrictions

Buyers may discover:

• high HOA fees

• rental restrictions

• pet or vehicle rules

• pending special assessments

If the HOA documents reveal something the buyer can’t accept, the deal may terminate during the review period.

9. Insurance Issues

Some homes can’t get affordable insurance due to:

• flood zones

• wildfire risk

• roof age

• previous claims

• outdated wiring or plumbing

If insurance costs skyrocket or coverage is denied, buyers sometimes cancel.

10. Final Walkthrough Problems

The final walkthrough ensures the home’s condition hasn’t changed — but surprises happen:

• repairs not completed

• new damage

• debris left behind

• personal items missing that should stay

• utilities turned off

If the home isn’t move-in ready as agreed, the deal may stall or collapse.

Final Thoughts

Home sales can fall through for many reasons — some preventable, some unavoidable. But with good communication, proper preparation, and the right real estate team, most issues can be minimized or resolved quickly.

Understanding these common pitfalls helps buyers and sellers stay ahead of problems and close with confidence.