From handshake to heartbreak

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Published Date 7/11/2025

“Fell out of escrow”; “The deal didn’t go through”; “It exploded.”

These are words no seller wants to hear, especially if they are on the verge of or already have moved out of their home. But let’s back up a bit. Realtor’s Kathleen Willcox says when a home's status changes from “for sale” to “sale pending,” it means the seller has accepted the buyer's offer and both parties are ready to move forward. The first round of clinking glasses ensue, and contingencies are supposed to begin being removed as inspections begin and financing details get fine-tuned. But what if, even when all signs point to go, the home sale just never takes off?

The real estate market is experiencing a troubling trend these days. A full 6% of pending home sales were canceled in May 2025, according to the National Association of Realtors. “This marks the third consecutive month of year-over-year increases in failed deals, up from 5% the same period last year. The surge reflects mounting pressures from high mortgage rates, affordability challenges, and stricter lending requirements,” says Willcox.

She explains how buyer's remorse has become a leading cause of deal collapses. In some parts of the country the market is still at a fast clip, where properties receive multiple offers and disappear within days. That creates pressure that leads to hasty decisions buyers later regret. Most purchase agreements include contingencies allowing exits, though complications arise once contracts are signed.

Financing hurdles also present major obstacles even for seemingly prepared buyers. “When loans aren't approved, buyers with financing contingencies typically recover earnest money,” says Willcox. “Alternative options like bank statement-only loans can help, and sellers often accommodate extended timelines since everyone benefits from successful closings.” However, she says, buyers can sabotage their own deals by making large purchases or opening new credit accounts before closing, dive-bombing their home owning future.

Home inspections frequently become deal-breakers when properties fail to meet standards. Failures typically end deals immediately. Motivated buyers can still proceed by negotiating seller-completed repairs or securing home warranties, however, if everyone works together.

The truly frustrating fallout occurs when coordinating multiple transactions. The buyer’s home may have been sold and fell out of escrow, causing a domino effect. Home sale contingencies can protect against being stuck with two properties but complicate timing. “Bridge loans” can help, but high interest rates for these types of interim loans and worrisome risk loom large.

And then there is the “appraisal gap.” Another rabbit hole to fall into. It’s a frustrating scenario when a property’s value comes in below the purchase price, creating a gap no one expected. Experts suggest that gaps up to $10,000 are often worthwhile investments since buyers typically recover the difference through equity growth. But more than that? Buyers may make the decision to walk away entirely, thinking they are overpaying for the home.

The secret sauce, then, is negotiation. Willing sellers and willing buyers are key to making it all work. With a glut of new listings as of late, however, buyers are now in the driver’s seat. So as a seller, Willcox advises holding off the clinking glasses until you hear the words, “You’re on record,” when the home has finally been transferred into the buyers’ names. Then and only then is there cause for celebration.

Realtor, TBWS

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American Home Lending USA, LLC - NMLS ID: 71983. To verify licensing, visit NMLS Consumer Access (www.nmlsconsumeraccess.org). Equal Housing Lender.

Jeff Beck

President

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American Home Lending USA, LLC

240 S Buchanan St, Edwardsville IL 62025

Company NMLS: 71983

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