The Number and the Trend Line

Start with the current data.

In July 2026, 14% of US home-sale agreements that went under contract fell through, the highest share in nearly three years on a seasonally adjusted basis and up from 13.7% a month earlier, according to Redfin’s analysis of seasonally adjusted MLS pending-sales data.

The trend line matters more than any single month:

• December 2025: roughly 40,000 agreements cancelled, 16.3% of homes that went under contract, the highest December share in records back to 2017, up from 14.9% a year earlier
• February 2026: more than 42,000 cancellations, 13.7%, the highest February share on record, up from 12.8% a year earlier
• March 2026: more than 50,000 cancellations, 13.4%
• April 2026: just over 47,000 cancellations, 13.4%, tied with January for the lowest level since September 2024
• July 2026: 14%, highest since November 2023

Redfin’s own framing is worth repeating because it cuts against the alarmist reading: the share of US homebuying deals falling through has moved in a narrow band of roughly 13% to 14% for four years. The increase over recent months is small. Cancellations reached a record high of about 17% in 2020.

So the honest summary is not “deals are collapsing at an unprecedented rate.” It is this: roughly one in seven signed contracts fails, that rate has been persistently elevated above the pre-pandemic norm of below 12% for four years, and it is currently at the top of its recent range. Elevated and sticky is a bigger deal for a seller than a temporary spike would be, because it means the risk is structural rather than transient.

Where the Rate Is Highest and Lowest

National averages hide the part that affects you.

Cancellations cluster in buyer-friendly southern markets with heavy inventory and fewer buyers, where house hunters have the confidence to walk away and easily find another property. In April 2026, Atlanta led at 19.3%, followed by San Antonio at 18.9%, Fort Worth at 17.6%, Tampa at 17.4%, and Phoenix at 17%. In December 2025, Atlanta hit 22.5%, meaning more than one in five pending sales failed.

At the other end, cancellations are least common in supply-constrained seller’s markets including Long Island and parts of the Bay Area. In February 2026, San Francisco recorded just 3.7% and Nassau County 4.5%. As one Redfin agent put it, buyers in those markets rarely back out because finding another house may be difficult.

The mechanism is straightforward. Cancellation rates track buyer leverage. Where inventory is abundant, walking away is cheap and buyers do it. Where inventory is tight, walking away is expensive and buyers do not.

If you are buying in a high-cancellation metro, sellers there have direct, recent experience of deals falling apart. Your certainty signals carry more weight in exactly the markets where you are also most likely to be competing on price.

The Five Causes of Collapse

Redfin’s data measures how often deals fail rather than attributing precise shares to each cause, and the reported reason is often not the real one. Redfin has specifically noted that buyers frequently exit through the inspection contingency even when the underlying reason is that the payments no longer feel affordable. Treat the ordering below as directional.

Cause 1: Financing falls through

The buyer was pre-approved on self-reported figures, and underwriting found something. Income that did not calculate as described. An unsourced deposit. A missed debt. A credit change. A job change mid-process.

The preventive move: Get pre-underwritten rather than pre-approved. Full underwriting on source-verified income, assets, and employment, completed before you make an offer, contingent only on appraisal and title. This converts the single largest category of collapse risk into work already done.

Cause 2: The appraisal comes in low

The property appraises below the contract price. The lender lends against the appraised value, and the buyer must cover the gap in cash, renegotiate, or walk.

The preventive move: Know your gap tolerance before you offer. Consider an appraisal-gap commitment for a specific dollar amount rather than a blanket waiver, so the seller sees a concrete number and you keep a defined ceiling on your exposure.

Cause 3: Inspection findings

Genuine structural, roof, foundation, electrical, or plumbing problems. Also, frequently, the exit route for buyers whose real concern is affordability.

The preventive move: Book the inspection immediately, not in week two. Distinguish deal-breakers from negotiable items in advance. Ask for credits rather than repairs where possible, since credits close faster and avoid disputes over workmanship.

Cause 4: Title issues

Undisclosed liens, boundary disputes, unknown heirs, errors in the public record, unresolved probate.

The preventive move: Request the preliminary title report as early as the contract allows. Title problems are the most fixable cause on this list if found early and the most damaging if found in the final week.

Cause 5: Change in buyer circumstances

Job loss, illness, a relocation, a relationship change, or simply revisiting the numbers with a lender and no longer feeling comfortable.

The preventive move: Partly outside your control. What is inside your control is buying below your maximum, so that a bad quarter does not turn into a cancelled contract, and disclosing any known upcoming change to your lender early rather than hoping it goes unnoticed.

Why Sellers Are Now Risk-Averse

When one in seven contracts fails, and the rate has stayed there for four years, sellers stop treating cancellation as bad luck and start treating it as a risk to be priced.

What a failed deal actually costs a seller:

• Weeks or months of additional carrying costs: mortgage, taxes, insurance, utilities on a house they believed was sold
• A relisting that shows a prior failed contract in the property history, which buyers and agents read as a warning sign
• Renewed marketing costs and renewed showings
• Frequently a lower eventual sale price, because a listing that returns to market looks troubled
• Disruption to their own purchase, if they were buying contingent on this sale

The questions listing agents now ask about every offer:

• Is the buyer pre-approved or fully underwritten, and what has actually been verified?
• Which lender, and will that lender pick up the phone?
• How much earnest money, and when does it go hard?
• Which contingencies, and for how many days?
• What happens if the appraisal comes in low?
• Has the buyer lost a deal before?
• How fast can they close?

These are not formalities. In a market where deals fail routinely, they are how a listing agent does their job.

The Core Trade: Certainty Beats Price

Here is the arithmetic sellers are performing, whether or not they articulate it.

A \$400,000 listing receives two offers:

• Offer A: \$425,000, standard pre-approval on self-reported income, 21-day financing contingency, broad inspection contingency, 30-day close
• Offer B: \$410,000, pre-underwritten with verified income and assets, 10-day financing contingency, appraisal-gap commitment to \$10,000, 15-day close

Offer A is \$15,000 higher.

Now weigh the downside. If Offer A collapses, the seller does not simply lose the \$15,000 premium. They absorb:

• Six to ten additional weeks of carrying costs
• A relisting with a visible failed contract in its history
• Renewed marketing and showings
• A likely lower eventual price, because a returned listing negotiates from a weaker position
• Disruption to their own next purchase

Put a conservative number on that. Two months of carrying costs on a \$400,000 home might run \$3,000 to \$5,000. A relisting price reduction of even 2% is \$8,000. Add renewed marketing and the value of the seller’s time, and the expected cost of a collapsed deal routinely exceeds a \$15,000 price gap.

That is why “certainty of close” has become a phrase listing agents use out loud when comparing offers. It is not a soft preference. It is expected-value arithmetic, and it is why the lower, safer offer wins more often than buyers expect.

The Seven-Step Build

Step 1: Get pre-underwritten.

Ask your lender to complete full underwriting on source-verified income, assets, and employment before you choose a property, with the approval contingent only on appraisal and title. One to three business days. This is the highest-leverage step available and it addresses the largest cause of collapse.

Step 2: Tighten your contingency windows.

Ten days for financing rather than twenty-one. Seven days for inspection rather than fourteen. Shorten only what your preparation genuinely supports. A seven-day inspection window with no inspector booked is a self-inflicted wound.

Step 3: Provide real proof of funds.

Current statements showing down payment and reserves. Verified asset documentation is stronger than a screenshot. If funds are moving between accounts or coming as a gift, document the trail now rather than under deadline pressure.

Step 4: Size earnest money deliberately.

The standard is often 1% to 3%. Going toward the upper end signals commitment because you have more at stake. Understand precisely when your deposit goes non-refundable and under which contingency, and make sure you can genuinely afford the risk you are signalling.

Step 5: Request the title report early.

As soon as the contract allows. Title issues found in week one are solvable. The same issues found in the final week kill deals.

Step 6: Book the inspection immediately.

Schedule it the day the contract is signed. This is the most common cause of self-inflicted timeline slippage.

Step 7: Offer a realistic fast close.

A pre-underwritten buyer can often close in 10 to 18 days after appraisal and title clearance, versus 21 to 30 for a buyer beginning underwriting after going under contract. Only commit to a timeline your lender has confirmed in writing. Missing your own deadline is worse than never having offered it.

A Fully Specified Example Offer

What all seven steps look like assembled into one offer on a \$400,000 listing:

• Price: \$408,000
• Financing: Pre-underwritten approval, verified income, assets, and employment, letter attached naming remaining conditions
• Earnest money: 3%, \$12,240, deposited within 24 hours
• Financing contingency: 10 days
• Inspection contingency: 7 days, inspector already booked
• Appraisal: Gap commitment up to \$10,000 above appraised value
• Title: Preliminary report requested at contract execution
• Closing: 18 days from acceptance, confirmed in writing by the lender
• Included: Lender contact details and a written statement that the loan officer is available to speak with the listing agent directly

Nothing there is exotic. Every element is available to an ordinary buyer with a competent lender and two extra days of preparation. That is the point.

Red Flags and Green Lights

Red flags that weaken an offer:

• Multiple hard credit inquiries in the last 30 days
• A recent job change with no documentation from the new employer
• A large recent deposit with no sourced explanation
• Minimum earnest money
• Long or open-ended contingency windows
• A lender the listing agent has never heard of and cannot reach
• Little or no reserves after the down payment
• High revolving debt relative to income

Green lights that strengthen it:

• Source-verified income, assets, employment, and identity
• A completed pre-underwriting with named remaining conditions
• Six or more months of reserves after closing
• DTI comfortably under the program limit
• Clean credit with no recent late payments
• A seasoned down payment from your own savings
• Earnest money at the upper end of local convention
• A responsive lender who will speak with the listing agent
• A closing timeline your lender has confirmed

How to Position the Offer

A strong offer that reads as ordinary is a wasted advantage. Two places to make it legible.

In the offer package. Do not attach the approval letter and hope someone reads it. Include a short cover note stating plainly what has been verified and what remains outstanding. Something along the lines of: this buyer has completed full underwriting on verified income, assets, and employment; remaining conditions are appraisal and title only; the lender has confirmed an 18-day close and is available to speak with you directly.

In your agent’s verbal pitch. Listing agents make recommendations to sellers in conversation, not in writing. Your agent needs a single sentence that survives being repeated. Something like: this is the offer that will actually close, they are fully underwritten, and the lender will confirm it on a call today.

Then make the call happen. A listing agent who speaks to your loan officer and gets a clear, confident answer is the most effective certainty signal in the entire process, and it costs nothing.

Three Offers, One House

A \$400,000 listing. Three offers arrive.

Offer 1: \$425,000

Pre-approved on self-reported income. 1% earnest money. 21-day financing contingency, broad inspection contingency. 30-day close. Out-of-area lender the listing agent does not know.

Perceived risk: high. Highest price on the table.

Offer 2: \$412,000

Pre-underwritten, verified income and assets. 3% earnest money. 10-day financing contingency, 7-day inspection. Appraisal gap to \$10,000. 16-day close. Loan officer available by phone.

Perceived risk: low. Middle price.

Offer 3: \$405,000

All cash, proof of funds attached. No financing contingency. 10-day close. Inspection contingency retained.

Perceived risk: very low. Lowest price.

What typically happens. Offer 3 has the lowest risk and the lowest price. Offer 1 has the highest price and materially more risk than the seller wants. Offer 2 wins in a large share of these situations, because it is \$7,000 above the cash offer while carrying risk the listing agent can characterise as close to it, and it is only \$13,000 below the highest bid while being far more likely to actually complete.

Offer 2 is not the highest number and not the safest structure. It is the best combination, and the combination is what sellers are actually choosing between.

If Your Deal Collapses Anyway

Some deals fail despite good preparation. Damage control:

Find out precisely why. Get it in writing. Whether it was financing, appraisal, inspection, or title determines whether you can fix it and whether it will recur on your next offer.

Ask about your earnest money. This is where you need your actual contract rather than general guidance. Earnest money outcomes vary significantly by contract terms and by state. Typically, a buyer who cancels within a valid, unexpired contingency window recovers the deposit, while a buyer who cancels outside all contingencies risks forfeiting it. Read your contract, and if the deposit is disputed, talk to a real estate attorney. Do not rely on any article, including this one, for that answer.

Fix the identified cause before offering again. If financing failed, get pre-underwritten. If the appraisal killed it, adjust your gap tolerance. If title, request the report earlier next time.

Ask whether re-engagement is possible. Some deals fail over a solvable issue. If the cause has since been resolved, it is worth having your agent ask.

Watch your timeline. A rate lock may have expired, verifications may need refreshing, and your pre-underwriting has a validity window. Contact your lender the same week so you are not scrambling on your next offer.