Discover the top reasons real estate deals fail, from poor negotiations to cold feet, and learn expert tips to avoid costly mistakes and ensure a smooth closing.

These days, it’s becoming increasingly common that almost three out of ten real estate deals fall apart right before closing, but why does this happen? It usually comes down to poor communication, second thoughts, or lack of preparation.

One major reason is bad negotiation during the inspection period. Buyers and sellers often can’t agree on what repairs should be made, and sometimes the issues feel too overwhelming for buyers, so they back out. In other cases, new problems come to light late in the process, making buyers rethink the entire deal.

Another common issue is outside advice. Buyers often get input from friends or family members who aren’t directly involved in the transaction. While they may mean well, this outside advice can cause confusion and lead buyers to second-guess their decisions.

Employment verification also plays a role. If a buyer changes jobs or quits without informing their lender, it can throw a wrench in the process. Lenders check employment status right before closing, and any unexpected changes can disrupt the financing, leading to a canceled deal.

“It’s crucial to guide your clients away from second-guessing their decisions by staying focused once they’ve made an offer.”

Another reason is that the buyer got cold feet. Some buyers keep browsing for homes, even after making an offer. This can lead to what’s called the “diamond in the window” effect—where something new and seemingly better catches their eye. Suddenly, they’re backing out of the deal, thinking they’ve found something better elsewhere.

If you’re a real estate agent, it’s crucial to keep your clients focused once they’ve made an offer. Encourage them to stop looking at other properties and remind them of the consequences of backing out. Many buyers don’t realize that even if they pull out of the deal, they could lose their earnest money and still be responsible for paying the agent’s commission. Agents fulfill their duties by bringing the deal to the closing table, so the obligation doesn’t disappear if the buyer walks away.

In most cases, it’s smarter to go through with the closing and, if necessary, resell the property later. It’s less stressful, saves money, and helps avoid unnecessary legal headaches. If you need an expert to help you avoid these pitfalls, you can contact me at 307-772-1184.