Why Real Estate Deals Fall Apart


Real Estate transactions can fall apart for a wide range of reasons. Because of this, it’s important to understand the different types of problems that can arise during a real estate transaction. In most cases, these snags can be worked out but in some instances, the problems reach the point of no return and the deal falls apart.

In this article, we are going to take a look at what we consider the “Fatal Four”. These are the most common reasons a real estate transaction falls out and never reaches the closing table.

Reason 1: The Wrong Real Estate Agent

A home sale’s success depends partly on how competent a real estate agent is at their job. The agent who is not good at their job can cause the deal to fall through. Some of the ways they can botch a deal includes not communicating effectively with a seller and making false promises about the likelihood of selling a house. The agent does not keep the client in the loop on every step of the real estate transaction. When a seller tries to contact them, they do not answer their calls or their emails nor do they return voicemails. The agent falsely promises to sell a home for top dollar or generate a quick sale; yet, they don’t keep these promises once the listing agreement is signed. Performing due diligence when hiring a real estate agent can prevent a home sale from falling through.

Reason 2: Saying Bye-Bye to Mortgage Pre-Approval

Just because a buyer receives preapproval for a mortgage, that does not mean they can keep it permanently. A lender can revoke the preapproval from a buyer when they receive information that gives them second thoughts about lending them the money. One of the common culprits behind the rescindment is the borrower’s questionable ability to pay. Being late on rent payments and not paying off credit cards or the last mortgage payments are just some of the mistakes that prompt the lender to rescind the preapproval. Another common culprit is the buyer’s lifestyle changes, such as a change in job and marital status (such as divorce). The buyer would not even have the money to purchase a house, causing the deal to fall through when a sale hasn’t even occurred yet.

Reason 3: Home Inspection Not in Seller’s Favor

Home inspection report that contains too many problems with a seller’s house can kill the sale, especially if the seller refuses to fix them or reach a compromise with the buyer. The buyer does not want to inherit the responsibility of repairing the maintenance issues after the purchase. Instead, they expect the seller to take care of them before they finalize the sale. Both parties can work with each other to resolve the issues mentioned in the home inspection report. However, the buyer can back out of the deal if they don’t reach the agreement with the seller, prompting the offer to fall through.

Reason 4. Failed Renegotiation during the Appraisal Process

The home appraisal can make or break a deal. Before putting the home on the market, the seller needs to make sure they have it priced correctly. There’s a chance that the seller will receive an appraisal that comes below the sales price; therefore, they need to work on increasing the appraisal. One of the options is to renegotiate the contract although they should only pursue it as a last resort. If the seller exhausts other options, they can renegotiate with the buyer on the price and the conditions they need to meet. If neither party succeeds in reaching the agreement, the sale falls through and the seller may have to start from scratch.


Knowledge is power especially during a real estate transaction. Knowing what to look for is the key to preventing these types of failures.



Written by boylan

Verified UserStory Maker

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