When Good Deals Go Bad

When Good Deals Go Bad

by | Nov 2, 2022 | Real Estate Law

You are selling your home and the deal is set to close in 2 weeks. You get a dreaded call from your lawyer that the buyer will no longer buy your house. You have moving trucks arranged, and you’ve already entered into an Agreement of Purchase and Sale of your new house. What is going to happen next?

You are buying a new house and the deal is set to close in 3 days. You get a call from your lawyer who explains that the sellers have had major damage to the basement of your soon-to-be house. What happens next?

Sometimes we see something occur or fails to occur that puts our clients in danger of defaulting under the Agreement of Purchase and Sale.

There are several reasons that we see real estate deals fall through. Here are some of the most common reasons.

Title Issues

Before the deal closes, the buyer’s lender will have a title company search the property. When a title search is performed, the search is looking for outstanding liens, old mortgages, and unpaid property taxes. Sellers also have issues that can delay a real estate deal like surveys, tenants, the current use of the house, house insurance, and rental items.


The biggest issue that we see with financing is appraisals that come back far too low. If an appraiser determines that the house’s true value is a significant amount less than the sale price, the deal can fall through.

Issues with the property

This is when we see something ‘wrong’ with the property that does not match the Agreement of Purchase and Sale. This can include:

  • Work was to be completed by sellers and was not completed.
  • Damage has occurred since the agreement was signed.
  • Dimensions are incorrect.

The sale of a house is legally binding at the point of contract exchange, both to the buyer and the seller. Often your lawyer and real estate agent can discuss a solution that is satisfactory to both parties when any of these situations arise. If a mutually agreeable solution can’t be reached, your lawyer can advise you of your next steps.

As the buyer, if the deal does not go through you have changed your mind due to unforeseen circumstances, a divorce for example, you are still responsible to hold your end of the deal. You will likely lose your deposit and be responsible to pay additional penalties and fees making the seller whole.

As the seller, if the deal does not go through due to you not fulfilling your end of the contract you can be sued for breach of contract. If you fail to disclose information, like damages incurred to the property after the contract was entered, the buyer can file a lawsuit against you.

This article is intended as an informative piece about the subject. It should not be taken as legal advice. We recommend you connect with a real estate lawyer about your specific legal issue.