Selling Your Home? Here’s Why More Deals Are Falling Apart (And How to Keep Yours on Track)

If you’re getting ready to list your home—or maybe you’ve already put it on the market—you probably have a vision of how things will go. The sign goes in the yard, buyers flood in, multiple offers roll in, and you pick the best one. From there, it’s smooth sailing to closing day—no hiccups, no surprises, no second-guessing from the buyer.

It’s understandable if that’s how you envision it; that’s been a fairly common reality for quite some time. In competitive markets, where demand outpaced supply, buyers had fewer options, and backing out of a contract wasn’t something many considered unless something major went wrong.

But things have been shifting. And while sellers may still hold a strong position in many areas, an increasing number of deals aren’t making it to the finish line.

Contract Cancellations Are on the Rise

According to recent data, more home sales are being canceled than in previous years. In January alone, over 41,000 home-purchase agreements fell through, representing 14.3% of all pending sales that month. That’s up from 13.4% a year prior and marks the highest cancellation rate for this time of year since at least 2017.

So, what’s behind the uptick in contract cancellations? Several key factors are at play:

• More choices, less urgency – Housing inventory has risen to its highest level since 2020, giving buyers more choices. Meanwhile, pending home sales have dropped. With more options available, buyers feel less urgency and are more likely to walk away during the inspection period or contingency phase, especially if a more appealing home hits the market.
• Economic uncertainty – Layoffs, rising costs, interest rate fluctuations, and global instability have made some buyers hesitant. Even those who initially felt confident may second-guess their decision once under contract, leading to cold feet and cancelled deals.
• High prices and sticker shock – Mortgage rates and home prices remain historically high, with January’s average 30-year fixed mortgage rate hitting 6.96%. Though rates have dipped slightly, affordability remains a major concern. Some buyers stretch their budget to make an offer, only to realize later that they’ve overextended themselves, especially when unexpected costs come up during the inspection or appraisal.

How Sellers Can Minimize the Chances of a Deal Falling Through

While some deal-breakers are out of your control—like a buyer suddenly losing their job or having a personal emergency—there are several things you CAN do to keep your sale on track and reduce the risk of a buyer backing out.

1) Price Your Home Strategically

Overpricing a home can be risky in any market, but when buyers have more choices, they become even more price-sensitive. A properly priced home:

• Attracts more buyers, increasing competition and reducing hesitation.
• Generates stronger offers, reducing the likelihood of low appraisals.
• Leaves less room for buyers to feel they overpaid and develop cold feet.

2) Choose Your Buyer Wisely

The highest offer isn’t always the best offer. Before signing a contract, consider:

• The buyer’s financial qualifications. A pre-approval is great, but a buyer with strong financial reserves and a history of stable income may be less likely to back out.
• The buyer’s demeanor. Are they eager and engaged? Or do they seem hesitant, overly picky, or noncommittal? A buyer who’s already expressing doubts may not be in it for the long haul.
• Contingencies. Fewer contingencies often mean a smoother, more secure transaction.

3) Keep Backup Buyers Engaged

When multiple buyers make offers, it’s tempting to simply decline the ones you don’t accept and move on. But keeping those buyers warm can be a smart move.

If your first deal falls through, you’ll want to circle back to other interested buyers without losing leverage. A quick and respectful message like—”We’ve accepted another offer, but if anything changes, we’d love to stay in touch!”—keeps the door open without making promises.

4) Don’t Lose a Buyer Over Negotiable Issues

Some sellers assume that if a deal falls apart, another buyer will come along soon enough. But if the market is even slightly shifting, you could find yourself starting from scratch and dealing with the same issues all over again.

Instead of letting a deal collapse over fixable problems, consider working with the buyer you already have to keep the transaction moving forward.

For example:

• Inspection concerns? Instead of rejecting requests outright, consider meeting the buyer halfway on repairs or offering a credit.
• Low appraisal? If the value comes in below the contract price, work with the buyer to renegotiate rather than walk away—you might face the same issue with the next buyer.

A little flexibility can go a long way in keeping a sale together.

5) Work With an Experienced Agent

Every market is different, and the best strategies will depend on local trends, buyer sentiment, and supply and demand. Having a knowledgeable agent by your side dramatically reduces the risk of a failed transaction.

A seasoned real estate agent can:

• Help you price your home accurately and position it competitively.
• Guide you in evaluating offers beyond just the dollar amount.
• Anticipate potential issues and negotiate effectively if complications arise.

The Takeaway:

More home sales are falling through than in previous years, but that doesn’t mean yours has to. The key is to price your home strategically, choose a solid buyer, and stay flexible when challenges arise. Deals can fall apart for many reasons, but with the right approach—and the right agent—you can keep your sale on track and avoid starting over.