How Often Do Home Sales Fall Through?

Reviewed by: Brandon Brown

Home sales falling through is a common, yet frustrating, reality in the world of real estate. A failed sale can feel like the rug being pulled out from under you. But how often does this happen, and why? More importantly, how can you protect yourself from this experience? In this guide, we’ll explore the reasons home sales fall through, share strategies to minimize the risks and explain how FlipSplit’s streamlined process helps ensure your sale goes smoothly.

What Causes Home Sales to Fall Through?

Home sales fall through for a variety of reasons, but the most common causes often boil down to conditions not being met. Here are the key culprits:

Financing Issues

Financing problems are one of the most frequent reasons for a failed home sale. Even when a buyer is pre-approved for a mortgage, things can still go wrong:

Loan denial – Changes in the buyer’s financial situation, like a job loss, can lead to their buyers lender denying the loan.
Mortgage rates – Rising rates can make the agreed-upon sale price unaffordable for the buyer.
Buyer financing delays – Slow loan processing can cause the deal to miss its closing deadline.

Inspection Problems

A home inspection is often required to finalize a sale. If the inspection uncovers major issues, like a failing roof or significant water damage, it can delay the deal. Home inspection contingency clauses in purchase agreements allow buyers to back out if the findings are unsatisfactory for them or repair negotiations break down.

Appraisal Challenges

If the appraised value of the home comes in lower than the agreed sale price, buyers may struggle to secure funds. This is especially challenging with an appraisal contingency in place, which allows the buyer to cancel the contract if the appraisal doesn’t match their expectations. If you’re selling your home to fund your next move or investment, understanding how delays or cancellations impact your net proceeds is important. Planning ahead and addressing these challenges early can help you avoid surprises.

How Often Do Home Sales Fall Through?

According to industry data and reports from the National Association of Realtors (NAR) about 6% of contracts are terminated, and 14% face delays depending on market conditions. This means that about 1 in 16 transactions are fully canceled, while delays impact nearly 1 in 7. While the chances are slim, there’s still a possibility, so it’s better to make the necessary preparations to avoid this experience. These interruptions are typically caused by issues like financing falling through, unexpected inspection findings, or buyer remorse, all of which can disrupt the closing process.

How Can You Minimize the Risk of a Sale Falling Through?

While no sale is guaranteed until closing, there are steps you can take to lessen the odds of a failed deal:

Pre-Inspection for Sellers

A pre-inspection lets you address potential issues before listing your property. By fixing major problems upfront, you can eliminate surprises during the home inspection and give buyers confidence in the condition of your home.

Accepting Cash Offers

Cash offers are a powerful way to avoid financing-related delays. Unlike financed offers, where buyers rely on a lender to approve their mortgage, cash buyers bring funds upfront. This eliminates the risk of buyer financing falling apart, a leading cause of failed home sales. Plus, if you’re a seller who is looking to reinvest quickly, especially in strategies like microflipping, cash offers provide the liquidity needed to act fast in a competitive market. Fortunately, companies like FlipSplit provide fast, cash buyer solutions, meaning there’s no need to worry about buyer financing falling apart. This simplified approach eliminates many of the contingencies tied to traditional transactions.

Understanding the Impact of a Sale Falling Through

A failed sale can be more than just disappointing. it can also have serious financial and emotional consequences.

Emotional and Financial Strain

For sellers, a failed deal can mean going back to square one. The emotional impact of relisting the property, adjusting plans, or dealing with another prospective buyer can be exhausting. Financially, it may also mean additional closing costs or carrying the property longer than expected, which means additional taxes.

Market Conditions

When a sale falls through, timing can become your biggest challenge. In a hot market, delays might mean missing out on eager buyers, and your home could lose some of its initial appeal. If it sits too long, you might have to lower the sale price to attract new offers. On top of that, rising mortgage rates or a seasonal slowdown can make it even harder to find a buyer.

Alternatives to Traditional Home Sales

If you’re worried about the uncertainty of a traditional sale, consider alternatives like cash buyers. Companies like FlipSplit offer a straightforward, no-contingency option that eliminates the risks of inspections, appraisals, or financing delays. With FlipSplit, you can:

Sell your home quickly, without the hassle of a drawn-out process.
Avoid the risk of a sale falling through, thanks to cash offers.
Enjoy a stress-free experience tailored to your timeline and needs.

How FlipSplit Can Help Avoid Sale Fallout

FlipSplit’s process is designed to minimize the risks of a sale falling through, giving homeowners a stress-free alternative to traditional sales. Here’s how we do it:

Streamlined Escrow Process

Delays in escrow often lead to pending home sales falling apart. FlipSplit’s straightforward escrow process makes sure you get faster closings by handling inspections, documents, and funds efficiently. No more waiting weeks for financing approvals or real estate contract negotiations to be finalized!

No Contingencies or Repairs Required

FlipSplit buys homes “as is,” so there’s no need for costly repairs or negotiating inspection results from your end. By removing the need for home inspection arrangements, we reduce the risk of last-minute surprises that could cause a home sale to fall through.

Be Confident in Every Step with FlipSplit

While home sales falling through is an unfortunate reality for many, it doesn’t have to be your experience. By understanding the common pitfalls and exploring alternatives like FlipSplit, you can confidently walk through the process and minimize your risks. Ready to sell your Southern California home with ease? FlipSplit simplifies every step, ensuring a smooth transaction and helping you avoid the common headaches of traditional sales. Contact us today to get started!

Reviewed by: Brandon Brown

As a long-time Asset Manager, Investor, Real Estate Agent, and Broker/Owner of BayBrook Realty in Orange County, Brandon Brown is one of FlipSplit’s lead Real Estate experts. Having worked on over 2,000+ real estate transactions, Brandon brings a depth of knowledge that ensures clients are appropriately treated with honesty and integrity. His insights and advice have been published in numerous blogs beyond FlipSplit, and he keeps a close eye on market trends and statistics, which are updated weekly on his social media pages. Outside work, you can find him participating and serving at church, cycling, mountain biking, surfing around Orange County and beyond, and enjoying time with his wife and two daughters.