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The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: irina88w/Getty Images June 24, 2022 TJ Porter is a contributing writer for Bankrate. TJ writes about a range of subjects, from to . Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
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Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Real estate transactions can fall apart for many reasons. Fortunately, a very small amount of home purchase contracts actually end up terminated — just 6 percent as of March 2022, according to the (NAR). If a closing hits a snag, it’s typically resolved rather than canceled altogether. Below are some of the top reasons home sales fall through, how to avoid these situations, and what to do if it happens to you. 5 reasons home sales fall through
Home inspection issues (32 percent): One of the most common reasons home sales fall through is a home inspection issue, according to NAR. Buyers often make an offer contingent on a clean inspection (one that doesn’t reveal major problems with the home). If the inspection uncovers extensive damage or other issues that’ll be costly to repair, the buyer can choose to walk away from the deal. Denied a mortgage (13 percent): Another common reason for a sale to fall apart? Issues with financing. Most buyers will have a mortgage preapproval by the time they start making offers on homes, but a preapproval isn’t the same as final approval. The mortgage lender could still deny the buyer a loan if the buyer’s financial circumstances have changed or if they didn’t disclose pertinent information at the time of preapproval. Without a mortgage, the transaction will fall through. Low appraisal (11 percent): Lenders almost always require an appraisal of the property to make sure it’s worth enough to secure the mortgage. If the buyer makes an offer and the home appraises for less than the proposed price, the lender might not be willing to approve the mortgage. Buyer stops working (5 percent): If a buyer loses their job (or source of income) between the time their offer is accepted and the closing, they might no longer be able to obtain a mortgage or afford the home. Deed or title problems (1 percent): Once you get past contingencies around the inspection and financing, it’s not as common for deals to fall through, but it can still happen. In most transactions, the lender requires title insurance, which means a title company has to perform a title search to ensure there are no liens or other claims to the property. In some cases, this search unearths issues with the title, which can lead to a canceled contract. How to stop a sale from falling through
Both buyers and sellers have a vested interest in ensuring the transaction goes through successfully. For buyers, it’s crucial to share everything about your financial situation with your mortgage lender when you get preapproved and to maintain the status quo while your application goes through underwriting. That means don’t apply for a new credit card, buy a car or any other big-ticket item, or change jobs (if you can help it). That also means being responsive to your loan officer if they have questions so you can avoid hiccups with the closing. Ideally, you want your lender to be able to issue final approval for your mortgage without delay. For sellers, it can make sense to get a pre-listing inspection so you can address any issues before a buyer’s inspector finds them. At the very least, this can help you avoid surprises and potentially give you an opportunity to make repairs at a budget you’re comfortable with versus needing to make concessions for the buyer. Of course, it can also help you avoid a terminated sale. “Sometimes a seller is not aware of significant problems in their home,” says Bill Gassett of RE/MAX Executive Realty in Hopkinton, Massachusetts. What to do if the sale falls through
If a home sale falls through, there’s not much you can do about that transaction specifically. If you were the buyer, ideally, you’ll have had a contingency to refund your earnest money deposit, and you can move on to the next listing. As the seller, if you know why the transaction failed, consider what you might do to prevent the situation from happening again. For example, if the buyer’s inspector found defects, it’s a good idea to take care of those (or be prepared to disclose them) before listing again. If the issue came down to financing, you might want to more carefully vet future offers with your real estate agent to ensure the buyer has the resources to complete the transaction. SHARE: TJ Porter is a contributing writer for Bankrate. TJ writes about a range of subjects, from to . Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Related Articles