Why Real Estate Sales Fall Through: Unveiling the Challenges in the US Market

Discover the various reasons behind real estate sales falling through in the US market and learn how to navigate these challenges successfully.

In the ever-evolving world of real estate, it is not uncommon for sales to fall through, leaving sellers and buyers in a state of disappointment and frustration. Understanding the reasons behind these failures is crucial for both parties involved. This article aims to shed light on the potential stumbling blocks that can cause real estate sales to fall through in the US market and provide insights on how to overcome these challenges.

Unrealistic Pricing

One of the primary reasons real estate sales fall through is unrealistic pricing. Sellers who set an inflated asking price may attract fewer buyers, resulting in a prolonged listing period. Conversely, buyers who make lowball offers can discourage sellers from considering their proposals seriously. To avoid this pitfall, it is essential for sellers to conduct thorough market research and work with experienced real estate agents to determine an accurate and competitive price range.

Financing Difficulties

Financing plays a pivotal role in real estate transactions, and any roadblocks in securing a mortgage can lead to a sale falling through. Buyers who fail to obtain pre-approval

Common Reasons Pending Sales Don't Cross the Finish Line

The appraisal is lower than the sale price.
The buyer can't sell their old home.
There are issues with the title.
The home isn't insurable.
The buyer is inexperienced.
There are details missing on the paperwork.
The buyer or seller gets cold feet.

Table of Contents

What causes real estate deals to fall through?

By far, the main reason why deals fall through is that buyers fail to get mortgage approval. This can happen for several reasons. Perhaps your credit score was too low or maybe your debt-to-income ratio is too high. Whatever the reason, it means you can't get the loan and will have to cancel the deal.

What does it mean when a sale falls through?

If a price for the sale of a property has been agreed between a buyer and a vendor but this deal collapses (and cannot be bought back to life) it is known as a "fall through". Fall throughs happen in around 30% of properties sold through agencies and 50% of properties sold privately.

Why do houses stay pending for so long?

There are a lot of mundane reasons a pending offer can just sit in limbo for months on end. Those include things like inspections, or a delay with the survey, appraisal, or even the homeowner insurance.

What month do houses sell best?

Sellers can net thousands of dollars more if they sell during the peak months of May, June and July versus the two slowest months of the year, October and December, according to a 2022 report by ATTOM Data Solutions.

What is currently one of the most common reasons a home sale falls apart?

Here are six common reasons why a deal might not make it to closing.

Financing not approved.
Contingencies not met.
Inspection problems.
Low appraisal.
Title issues.
Cold feet.
Warning signs to look for.
FAQs.

how much di real estate agents make — how much do real estate agentsmake

Many in the real estate industry believed Q4 of 2021 was the new normal.

They had made it.

They splurged on new cars, a boat, a vacation house.

Turns out that was the peak, and sales are now down around 70%.

Many are now making hard decisions.

But the lesson is valuable.
— StripMallGuy (@realEstateTrent) October 16, 2023

How long do most real estate agents last?

Most real estate agents fail in their first year, according to research. Three common mistakes that agents make is inadequate prospecting, failing to market properties in ways that lead to fast sales, and not following up with clients.

Frequently Asked Questions

Why would buyers financing fall through?

Deals can fall through for any number of reasons. An inspection may reveal something unacceptable about the home, or the buyer's mortgage application may be denied. In some cases, a title search may turn up legal issues with the home, or an appraisal may come back significantly lower than the agreed upon sale price.

What is the slowest time of the year to sell a house?

The number of homes sold usually increase in the spring season. The sales of houses between February and March increase 24%, followed by the busiest months of May, June, July and August. In contrast, the slowest months are November, December, January and February.

What is the most common reason for a property not to be sold?

Your price is too high

No doubt about it, the most common reason for a home not selling is that the asking price has been set too high. The reasons for setting your price too high, to begin with, are many. Ranging from over-enthusiastic listing agents to unrealistic seller expectations.

FAQ

Can a deal fall through after closing?: There are numerous reasons a deal could fall through on or after closing day, including buyer's/seller's remorse, missing documents, and more. But it's also possible your loan could be denied at the last minute. And you, the buyer, don't have financing, the deal is off.
What is the most common reason for a purchase agreement to fall through?: The Mortgage. By far, the main reason why deals fall through is that buyers fail to get mortgage approval.