4 Reasons Home Sales Fail Before Closing

By Gregg Tepper

I have been married to my wonderful wife Letha for 29 years. We have 3 children: Max, Alexander and Charlotte. I have been a licensed Realtor in the New Orleans area for 20 years and am the Operator of The Tepper Group with Keller Williams Realty in Mandeville. Our team services the entire New Orleans and Baton Rouge metro areas. Our team of partners has well over 40 years of experience. In 2024 we helped 132 families buy, sell and lease homes, land and commercial investments.

If you’ve heard more stories lately about buyers backing out, sellers canceling listings, or contracts dying right before the finish line, you’re not imagining it. This is one of the biggest under-the-radar real estate stories heading into 2026, and it’s catching both buyers and sellers off guard.

Redfin’s end-of-2025 data showed contract cancellations at their highest level since before the pandemic. Redfin’s Chief Economist Daryl Fairweather called that period a record high, and the reason is not mysterious. Buyers and sellers are simply not seeing the deal the same way anymore. When expectations are misaligned, even a small bump like an inspection negotiation, a delay, or a last-minute cost surprise can unravel the whole transaction.

In this article, we break down the four main reasons home deals are falling apart in 2026, along with practical steps to help buyers and sellers keep a contract together through closing.

1. The motivation gap is wider than it used to be. Buyers are paying high prices while mortgage rates are still in the 6% range, and homeowners’ insurance costs remain elevated in many areas. That combination makes the monthly payment feel heavier than people expected, even when the purchase price looks reasonable on paper.

Sellers, meanwhile, still have pandemic-era pricing in their heads. Even when some sellers adjust, many do not want to budge much because they are sitting on a 3 percent interest rate and may be buying again, too. If they sell, they often need a certain net to put down on the next house since their new rate will likely be higher.

This is where tension shows up. A small roadblock, like inspection repair requests, a tough appraisal, or a delayed timeline, can quickly turn into a deal breaker because both sides already feel stretched.

For buyers, I recommend getting fully pre-approved. You should also consider a rate lock when it makes sense, and confirm your real costs early, including homeowners’ insurance and flood insurance if applicable.

For sellers, stay open to price adjustments or strategic concessions, such as a repair allowance or help with closing costs, when it keeps a serious buyer at the table.

2. Buyer leverage has returned, and that changes everything. For most of 2021 and 2022, sellers called the shots. That has changed. The sale-to-list price ratio, which reflects how close homes sell to their list price, has been dropping. More homes are selling below list, and buyers have more room to negotiate.

This is a healthier market dynamic, but it can also create more friction. Without bidding wars or backup offers waiting in the wings, sellers have less leverage to “hold firm,” and negotiations can take longer. The longer a deal drags on, the more time there is for second-guessing, frustration, and cancellation.

For buyers, when a home has been sitting on the market for a while, make a thoughtful offer and ask for concessions or repair allowances when appropriate. If the home truly checks every box, be ready to move decisively.

For sellers, if your home is not gaining traction within the first three to four weeks, consider a small price adjustment sooner rather than later. Time on market quietly erodes leverage, and it can create the impression that something is wrong even when it is not.

3. Seasonality and consumer behavior still drive deal fallout. The market naturally slows in fall and winter. Holidays, school routines, and weather disruptions pull attention away from buying and selling. Fewer buyers are actively touring, fewer sellers are motivated to make changes, and timelines are more likely to stretch.

Mortgage rates also do not create instant market swings. They tend to move in small steps, and they change daily. Even when rates trend down overall, there is rarely one magic number that suddenly pulls everyone off the sidelines. It is usually a trickle effect, where a few more buyers enter as rates drop, but not enough to create a rush.

At the same time, some buyers are also sellers, which means new inventory can increase competition. If buyer demand does not rise at the same pace, it can put downward pressure on prices, making negotiations even more sensitive.

Buyers should stay ready with clear numbers and a realistic timeline. Sellers plan for slower seasons and focus on pricing and terms that keep momentum moving.

4. The market is not one market, and local differences are everything. Real estate is hyperlocal. One city can behave differently from the next. One neighborhood can outperform another. Even within the same area, different price points can move at different speeds.

Nationally, there are also major regional differences. In some markets, job growth and affordability are keeping demand strong. In others, heavy construction and increased inventory have cooled activity. Local job announcements, new development, and major employers moving in or expanding can quickly change demand in a specific pocket of a state or county.

This is why national headlines can be misleading. A “housing crash” story might be true somewhere, but not where you live. The best decisions come from local zip code data and real-time comparables, not broad predictions.

I recommend tracking your local market, your price bracket, and your neighborhood trends. That is how you price correctly, negotiate confidently, and avoid surprises that cause cancellations.

What this means for buyers, sellers, and homeowners in 2026. What is happening right now is not a housing crash. It is a market reset. Deals are falling through more often, not because the market is broken, but because both sides are adjusting after years of unusual demand and unrealistic expectations.

For buyers, preparation is an advantage. Confirm financing, insurance, and true monthly costs early so you are not forced into a last-minute decision. For sellers, pricing based on current comparables and staying flexible on reasonable concessions can keep serious buyers engaged long enough to get to closing.

If you would like to talk through your options, call 985-218-5445 or email TGroup@kw.com to schedule a free, no-obligation, hassle-free one-on-one conversation. We will help you build a clear plan for your real estate goals, whether you are buying, selling, or investing.