(Pt 3) How to Keep Your Real Estate Purchase Agreement on Track

By: Melissa Dittmann Tracey

Why Do Sales Fall Through After a Real Estate Purchase Agreement Is Signed?

After a legally binding real estate purchase agreement has been signed, about 7% of real estate transactions were terminated before closing, according to the April 2025 REALTORS® Confidence Index Survey, based on thousands of real estate professionals’ transactions nationwide. Sixteen percent of contracts faced delays to settlement.

McGee says the most common reason she sees are flagged items from a home inspection and the fallout. Either a seller refuses to make fixes or the buyer is too demanding about requests for repairs. In one transaction she worked on, home buyers requested light bulbs in a bathroom to be changed to a softer color, McGee adds.

“I always emphasize to my clients the points in a transaction where the sale could fall apart. But I also assure them that if we face any issues, I can guide them on what we can do,” McGee says.

Here are some common reasons a real estate transaction may not reach closing and options to handle the roadblocks.

Appraisal Is Lower Than Buyer’s Agreement to Pay

The appraised value for the home comes in lower than what the buyer agreed to pay. A lender will approve a mortgage for only the appraised amount.

Options include:

• Negotiate a price reduction with the seller to match the appraised value.
• Agree to pay extra cash to the lender to cover the difference between the appraised value and the purchase price.
• Appeal the appraisal and request a reconsideration. Ask your agent to provide supporting information on comparable sales data to help justify the sales price.
• If you have an appraisal contingency in the home purchase agreement, you can cancel the transaction without penalty.

The Home Inspection Uncovers Serious Problems

No home is perfect, but serious problems —for example, with the home’s foundation or major systems — may concern you enough to renegotiate with the seller.

Options include:

• Ask the seller to make some of the repairs flagged in the inspection report.
• Use the inspection report findings to support a request for the seller to lower the sale price.
• If you have an inspection contingency in the home purchase agreement, you can cancel the transaction without penalty within a certain period of time.

Mortgage Financing Doesn’t Come Through

A buyer may be unable to obtain a mortgage to complete the purchase of the home. Sometimes a buyer’s financial situation changes while under contract, such as from a job loss or a sudden medical situation.

Options include:

• Ask the seller to grant a loan extension or extra time to obtain financing.
• Explore alternative financing, such as loans through the Federal Housing Administration, which are known to be more friendly to first-time home buyers. Qualifying requirements for credit scores and down payment thresholds for approval may be more lenient.
• Consider a cosigner or guarantor on the loan, which may help you qualify.
• Ask the seller to consider renegotiating the terms of the real estate purchase agreement to lower the price.
• If you have a financing contingency in the home purchase agreement, you can cancel the transaction without penalty.

Title Inspection Finds Problems

A title inspection of the home could show unresolved liens or legal disputes over the property’s ownership.

Options include:

• Ask the seller to clear the title before closing — for example, by paying off any outstanding lien or resolving any legal disputes involving the property. Wait for the title to be cleared before proceeding.
• Ask the seller to use title insurance to cover the cost of resolving the title issues.
• If you have a title contingency in the home purchase agreement, you can cancel the transaction without penalty.

Buyer Changes Their Mind

Buyers occasionally change their minds about purchasing a home. They may have faced a job relocation, found a house they liked better, been unable to sell their current house, or just fallen out of love with this home.

Options include:

• If the contract includes contingencies — such as for the sale of a current home — find out if those contingencies apply to the situation. Contingencies are used in a real estate purchase agreement to help a buyer cancel a transaction without penalty.
• Back out of the contract and forfeit your earnest money deposit.

Seller Becomes Reluctant

On the flip side, a seller could change their mind. They may have experienced sudden financial trouble, a medical issue, or another situation prompting them to want out of the transaction.

Options include:

• Seek a refund of the earnest money deposit.
• Request compensation because of the seller’s breach of contract. This might include additional costs you might incur as you look for another property.
• Buyers could potentially sue the seller for “specific performance,” to try to force the seller to honor the home purchase agreement, but buyers should weigh the expense and time of waiting for a legal proceeding.

While unavoidable situations can sometimes arise, take heart. After a purchase contract is signed, about 95% of transactions are completed. Working with a real estate agent can help improve your chances that any hiccups won’t derail or delay your transaction.

“Your agent knows your contract backward and forward,” McGee says. “They know when you need to get ‘X’ done and then what you need to do next. They’ll keep buyers on timelines and take them where they need to go.” That is, all the way to a happily ever after in their new home.

Published: June 17, 2025