Top 4 Reasons Real Estate Contracts Fall Apart in 2025

By Bryan David

Bryan David is one of the best REALTORS® serving Ocean Springs, Biloxi, Gulfport and the entire coast. He is a Biloxi native, military veteran and retiree, and a multi-year top-producing agent with hundreds of satisfied clients.

You’ve finally gone under contract, so you’re in the clear, right? Not so fast. The reality is that deals fall apart more often than people realize, and sometimes for reasons that even seasoned buyers and sellers are caught off guard by. I’ve watched eager buyers lose their dream home just days before closing, and sellers see solid offers disappear after an unexpected inspection or financing hiccup. If you’re planning to buy or sell, understanding these pitfalls could save you time, money, and a lot of stress.

Financing issues are more common than you’d think. Approximately one in seven real estate transactions fails due to financing issues. Maybe interest rates spike, the appraisal falls short, or a buyer unknowingly tanks their credit score right before closing by opening a new line of credit. If you’re buying, protect yourself by locking in your rate early, avoiding major purchases, and working with a lender who offers transparent pre-approval, not just a vague pre-qualification. Sellers, don’t skip the vetting process: ask detailed questions about your buyer’s financing upfront and prioritize offers from well-qualified buyers.

Hidden home issues can derail a deal. A home might look perfect until the inspection reveals aging plumbing, an old roof, or outdated electrical systems; suddenly, buyers get nervous and back out. Sellers can avoid this by tackling major repairs before listing (or pricing the home accordingly). Buyers, especially those considering older homes, should prepare for a few potential issues and use the inspection report as a negotiation tool rather than a deal-breaker. And if the home has good bones but needs updates, remember that renovation loans exist for a reason.

Cold feet and unrealistic expectations can be a problem, too. Emotions run high in real estate, and lately, I’ve seen sellers refuse reasonable negotiations and buyers walk away over last-minute jitters or sensationalized headlines. The key to keeping a deal alive is to set realistic expectations from the start, stay level-headed, and maintain clear communication. Whether you’re buying or selling, staying focused on the end goal (not the minor bumps along the way) makes all the difference.

Rising insurance costs may lead buyers to back out. Insurance premiums are climbing, particularly in coastal areas, but it’s not just about flood risk anymore. Insurers now scrutinize the age of a home’s major systems, its proximity to fire services, and other factors that can spike costs. Buyers, get insurance quotes early to avoid sticker shock. Sellers, address any red flags, like an old roof or outdated wiring, before they spook both buyers and insurers.

The best way to avoid surprises is preparation. The more you know upfront, the smoother your transaction will be. If you want expert guidance to navigate every step, from contract to closing, reach out at 228-215-1861, email expectmore@expectrealty.com, or visit expectrealty.com. I’m here to help.