8 Most Common Reasons Sellers Back Out of a Sale, According to Real Estate Agents
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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It’s not surprising that homebuyers sometimes back out of a deal — putting down that huge amount of money can easily lend itself to cold feet. It’s less common, however, for sellers to back out of a deal, but it does happen.
Real estate experts explained the most common reasons a seller might back out of a deal, so that buyers can be vigilant of these circumstances when setting out to buy a home.
When the Sale Is Contingent Upon Construction
A deal can fall apart if it’s contingent on the seller’s newly built home being completed by a specific date, according to Andrew Fortune, a realtor and owner of the real estate brokerage Great Colorado Homes. This happened to a deal he was working on.
“Once the new build completion date had passed, the deal fell apart because the seller couldn’t sell. This isn’t really a situation where the seller backed out,” he said. “The buyer knew going in that there was a chance the deal might not work, being contingent on the sale of another property.”
Find out if the seller is waiting on new construction to be able to sell — your timelines might not align.
Financing or Timing Issues
Most of the time, sellers are also buyers and are trying to navigate their next home, according to Tammie Carter at Engel & Völkers Atlanta.
“If [the seller’s] new home contract falls through, they may cancel the sale to avoid being temporarily homeless,” she explained.
For buyers, it’s good to know this detail about the seller upfront, so don’t be afraid to ask.
Inspection Repairs
It’s also not unheard of for a seller to back out when a buyer asks for repairs after inspection, which Fortune called “the only safe way out without leaving a paper trail.”
If the buyer submits an inspection objection, the seller is legally allowed to not respond to it, which causes the contract to fall apart, Fortune explained.
If a seller ghosts you after such a report, this is probably why.
Financial Burden
One of the main reasons sellers back out is “misunderstanding the true cost of selling,” according to Brett Johnson, a licensed real estate agent and owner of New Era Home Buyers.
He said many sellers don’t realize they’re responsible for both sides of the agent commissions and the bulk of the closing and title fees.
“If their agent hasn’t walked them through a clear net sheet upfront, the final numbers can be a gut punch which leads to regret and cancellations.”
Cold Feet
Another big reason for sellers to back out is just a common human experience in the face of a big change — hesitation, Johnson said.
Especially if a seller has lived in their home a long time, it’s not uncommon for sellers to get cold feet when the reality of moving sets in, he said. “Sometimes they agree to a sale before they’re emotionally ready to let go.”
While buyers may not be able to gauge this information upfront, if you sense whiffs of extreme nostalgia or regret about selling, maybe consider another property.
Unrealistic Expectations
Some deals fall apart because of unrealistic expectations, too, Johnson said, when a hoped-for sale price doesn’t materialize.
“A seller may get a fair offer but after hearing a neighbor got more or seeing a higher price on Zillow, they try to push for more mid-contract. That kind of thinking usually backfires.”
Multiple Parties Required
Problems also tend to arise when multiple people have to agree on the sale — like in probate or co-owned properties, Johnson said.
“If one person changes their mind or stalls paperwork the whole deal can fall apart. These situations require clear documented consensus from everyone involved before going under contract.”
That was the case in a deal that Andrew Fortune was representing.
“[The seller’s] father-in-law passed away, and she was appointed the executor of the estate. She had to manage three other sisters who were very difficult to deal with. When we received an inspection report revealing issues with the property, her sisters couldn’t agree on a resolution, and the deal fell apart. As far as I know, they still own the house and have never been able to get along enough to sell it.”
Buyers can ask their real estate agents to ascertain if probate or co-owners are involved.
Better Offers Come In
While people do get emotional about real estate, at the end of the day it’s a financial transaction, thus, sometimes better offers come in after a seller accepts another contract, according to Carter.
“And some of those offers may contain fewer contingencies and even a higher sales price tempting them to back out or try to find a reason to back out,” she said.
While buyers can’t control all the circumstances around a seller’s actions, work with your real estate agent to ask leading questions that can give you a sense of the seller’s likelihood to commit to your deal.
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