What percentage of pending house sales fall through? A very low percentage, a fraction of 1%. In fact, even under contract deals that still have outstanding contingencies rarely fail. For one of these deals to fall apart so late something dire and unforeseen must come up. 

  • Pending sales do fall through, but only a tiny number 
  • A seller may back out a pending sale, but the buyer may sue them 
  • A buyer may back out of a pending sale, but they probably will lose their earnest money 

One party backing out a deal so late is very uncommon. The time and effort that both parties and their professional aides put into it usually means that unless there is an unforeseen, insurmountable obstacle the sale will close. 

How Often do House Sales Fall Through? 

Pending sales do sometimes fall through. Mymove.com shows us that the two most common reasons are: 

  • Out of control emotions and a lack of professional decorum 
  • A major financial setback for the buyer 

The first should never happen. Real estate agents and attorneys should never let emotions take over the process. Often disagreements of inspection issues can get heated between the two parties. If the professionals do not deal with them adequately and allow them to fester it can blow up at the closing. 

The second may happen one of two ways. If the buyer makes a significant purchase, such as a car, it will upset the bank’s underwriting process. Likely, the lender will not approve the loan. Again, this is something that the professional real estate agent and attorney should say on top of so the buyer will not make this mistake. The other way it may happen is if there is a crisis. The buyer loses his job, has a medical emergency, or there is a death in the family.  

What percentage of pending sales fall through? 

The percentage of house sales that fall through is about 4%. This is according to Trulia. This is an old report, from 2016, and it showed an upward trend over time. Unfortunately, current data is unreliable, but anecdotally most professionals believe that the trend continues to rise. Even so, about 95% of real estate contracts close. 

For pending sales, meaning contracts where the contingencies are met, that percentage is even lower. This is because most of the time deals fall apart over inspection issues.  

Pending Sale Back on Market 

A property back on the market means that it is available for purchase, even if it had a previous contract that was pending. If you see a house marked this way, be aware that it may be due to an inspection issue.  

If the home inspector uncovers a major problem, then the buyer may renegotiate or back out of the transaction. Should the buyer cancel, the seller may relist the property, but they must disclose any problems that they learn about.  

On the other hand, the problem may have been with the buyer and there is nothing wrong with the house. Either way, always do your due diligence because it is such an important purchase. 

Can a seller back out of a pending sale? 

A seller can back out of a pending sale, but the buyer may sue because of a breach of contract. The only way to avoid a breach of contract is with a contingency clause. 

Most contingencies contained in the contract are for the buyer’s protection. Often issues arise, and the buyer wants remediation or renegotiation. If the seller is unwilling, then then he/she may cancel the contract without penalty. 

However, if the seller simply wants to terminate without cause, they buyer has a case to sue the seller for breach of contract. Whether the buyer pursues this depends on different factors: 

  • How much time they invested 
  • How much they want the house 
  • Whether they have the resolve to go to court 

Emotions play a big part. If the buyer is very angry then they likely will go to court for compensation. 

Can buyer back out day before closing? 

A buyer may back out before the closing day, but they may lose their earnest money unless there is a breach of contract by the seller. There are times when the seller is angry and does something foolish like inflict major damage to the property. In this case, the seller can back out and receive his earnest money back. 

However, without cause the buyer will lose the earnest money. This is much more common than a lawsuit because the funds are held in escrow. Therefore, it is much more accessible for the seller. 

Final Thoughts About What Percentage of Pending House Sales Fall Through 

Very few pending sales fall through. This is because buyers and sellers generally want to make the transaction and they have professionals advise them and help them navigate the process.  

However, unforeseen problems may arise. Financial setbacks, unknown structural problems with the property, and emotions are all reasons that sales may fall apart. Sometimes they may be overcome, but other times they cannot. 

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