Why Are 1 in 7 Home Deals Falling Apart, and How Can You Protect Yours?

Getting a home under contract no longer means the deal is done. According to a Redfin report, 14.5% of homes that went under contract in September were cancelled, the highest share on record outside of the March and April 2020 pandemic shutdown. That number is national, and the Staten Island and Brooklyn picture is calmer, but the reasons deals collapse are the same everywhere.

Watch on YouTube • Browse every Daily Tesla News episode

What did Redfin find about cancelled home deals in September?

According to Redfin, 14.5% of homes that went under contract in September were cancelled before closing. That is the highest share Redfin has on record outside of March and April 2020, when the pandemic shutdown froze the market. Pending home sales also fell 4% from August to their lowest level since spring 2014, and pending sales declined in every major U.S. market Redfin tracks. A cancellation counts any accepted deal that never closes, whether the buyer walked, the financing failed or the seller backed out.

Why are so many home deals falling apart right now?

Redfin points to a few forces working together. Inventory has climbed to its highest level since early 2020, which gives buyers leverage and makes them more willing to walk away over an inspection issue, cold feet or a better house down the street. Affordability and economic uncertainty also play a role, since higher borrowing costs or a change in a buyer's job or finances between contract and closing can push a deal off track. Inspection and appraisal disputes that never get resolved round out the list. A higher cancellation rate is not purely bad news for buyers, since it partly reflects that they have more choices than they did a few years ago.

Is the 14.5% cancellation rate happening in Staten Island and Brooklyn?

The 14.5% figure is a national number, and it should not be applied directly to local deals. Staten Island and Brooklyn have been running tighter and calmer than many Sun Belt and Western markets where inventory has piled up, and Joseph Ranola is not seeing anywhere near that cancellation rate in his own transactions across the 2 boroughs. Neighborhood level cancellation data is not widely published, so the national trend is best read as a warning about what causes deals to fail rather than a forecast for any one block.

How can buyers protect their deal from falling apart?

Start by getting fully underwritten before you shop, not just pre qualified, so your financing has already been reviewed by the lender. Between contract and closing, avoid big purchases, new credit cards or a new car loan, since a change in your debt can sink a mortgage approval at the last minute. Take the inspection seriously, but separate real problems from small, fixable items, because walking away over minor repairs can cost you a home you wanted and the money you spent getting to contract.

How can sellers protect their deal from falling apart?

Look closely at the buyer's financing strength before accepting an offer. A fully underwritten buyer with a solid down payment can be safer than a shakier buyer who offered more. When the market allows it, keep a backup offer in play so a cancellation does not send you back to square one. Be reasonable about fair inspection requests, since refusing to address a legitimate, fixable issue can cost you the entire sale and add weeks or months back on the market.

What should Staten Island and Brooklyn buyers and sellers take away from the Redfin report?

In New York, an accepted offer is not binding until both sides sign a contract of sale prepared by their attorneys, and most contracts include a mortgage contingency, so there are real windows where a deal can still unravel. Brooklyn co-op purchases add a board approval step on top of that. The practical takeaway is to treat the time between accepted offer and closing as active work, not waiting. A knowledgeable agent and attorney who spot financing, inspection and appraisal problems early can usually work around them before they end the transaction.

Questions about how this affects your home in Staten Island or Brooklyn? Work with Joseph Ranola, or text or call (917) 905-2541. New episodes of Daily Tesla News break down the NYC real estate stories that move the market.