Why Buyers Are Backing Out of Real Estate Deals Right Now
If you’ve been in the market lately, you’ve probably noticed that getting a deal to the finish line feels harder than it used to. Escrows are falling apart, and it’s happening at every price point. On our latest episode of Off the Market, Damin, Jamie, and I broke down the top reasons why — and I’ll be transparent, I walked into that conversation actively navigating two separate transactions, both involving mold. So this topic was not theoretical for me.
The Inspection Period Is Where Most Deals Break Down
According to data from Keeping Current Matters via Redfin, home inspection issues and repair negotiations account for roughly 70% of deals falling out of contract. That number is consistent with what we’re seeing right now in the Coachella Valley. Buyers go under contract, inspections happen, and suddenly there’s visible mold between a bedroom and a bathroom wall, or plumbing issues that have been quietly Band-Aided for years. At that point, the negotiation gets real fast.
What a lot of buyers don’t fully understand going in is that sellers are not legally obligated to fix anything. They can respond to a request for repairs with a flat no. That puts the buyer in a position where they have to decide: do we move forward as-is, do we negotiate a price reduction, or do we walk? And more buyers are walking. What sellers need to understand on the flip side is that if a deal falls through and the home goes back on market, California law now requires you to provide all prior inspection reports and receipts to the next buyer. That changed in July of last year, and it has real teeth.
Insurance Claims and Disclosure History Follow the Property
One thing that doesn’t get talked about enough is what happens when a seller has filed an insurance claim on the home. That history does not disappear. When a buyer shops for homeowner’s insurance, carriers can see prior claims tied to the property. If the repair work was never completed with those insurance funds, it becomes a significant problem during escrow and can absolutely kill a deal. Sellers who have filed claims need to be upfront about it in their disclosures, because it will come out one way or another.
Fear and Economic Uncertainty Are Pushing Buyers to the Exit
Not every fallout has a clean paper trail. Some buyers get deep into a transaction and back out because they’re scared. The economy feels uncertain, the purchase price feels enormous, and the inspection report hands them a list of issues that makes everything feel riskier than it did the day they made the offer. As agents, part of our job is helping buyers separate genuine red flags from fear-based hesitation. Those are two very different things, and they require two very different conversations.
If any of this sounds familiar, I want to hear about it. Head to our latest YouTube episode, watch the full breakdown, and drop your experience in the comments. Have you had a deal fall apart? Were you the buyer or the seller? Let’s talk about it.
