When Deals Fall Apart – Seller Focused.


Real estate has many moving pieces. You have the sellers, the buyers, the mortgage company, the title company, the appraiser, the inspector, the listing agent, the buyer’s agent, the insurance company and the friends and family of the buyers and the sellers. There are a lot of hands in the process of getting to the closing table. Sometimes, one of these hands creates a problem for the deal and it unravels and falls apart.

What happens when a deal falls apart? This depends on many factors and what side of the transaction you are on. This blog will focus on the sellers’ side. We will try to do it in order of the stages of the process to give an idea where you may see some of these issues.

Inspection: Most buyers will request time to get a professional inspector (or they should, and their agent should advise this). The inspector’s job is to look at the entire piece of real estate and find out what condition each part is in – from the walls to the floors to the electrical and plumbing, to the roof and the nooks and crannies top to bottom.

Unless it is a newly constructed home, the home is used, and the inspector will find things that are used and low on life. Do not be offended by this, it is their opinion on the home, and they work for the buyer to find things. Even newly constructed homes will have things found by inspectors.

After the inspection, the report goes to the buyer and the buyer’s agent for review. Depending on what they find, there may be a new round of negotiation about price, credits, or a withdrawal of the deal. This is one of the first places a deal may fall apart if all parties cannot agree or the buyer wanted to walk away since there are too many variables in the inspection they want to contend with.

If the deal falls apart the EMD is returned to the buyer (as long as it is within the negotiated inspection time frame asked for in the PA).

As a note, if the property has a well or septic, there many be additional inspections that will be needed, and again negotiations may happen, or the buyer walks away.

Appraisal: The value of the home is important to the buyer and the bank if they are getting a loan. The buyer and the bank will want to make sure the value of the offer is supported by an appraisal from a professional independent source.

If the appraisal comes in with a solid value at or above the offer price, the deal is good. If it comes in lower than the offer price, negotiations will happen, or the client will choose to walk away. You can agree to lower the price to keep the deal going if all parties agree.

If the deal falls apart here, the EMD is returned to the buyer (as long as it is within the contract terms).

If you are working with a listing agent, they can typically put together the comps they used to list the home and dispute the appraisal.

Loan/Mortgage: The loan starts with the pre-approval or pre-qualification stage and continues all the way to the close. One of the contingencies is the mortgage section of the purchase agreement. While a mortgage/loan is in process there are many document requests, verifications, along with review of the appraisal. There are times in this process where the loan becomes denied – this could be that something changed with the borrower or something that was missed in original application makes the loan unable to close.

There are situations that borrowers do not provide the lender with all the required items, or take their time, or go out and buy something before close that kills the loan. The borrower can be the fault the loan cannot close.

The EMD and who it goes to will be based on so many factors and will be negotiated when the financing can no longer go forward. The EMD can go to the seller or back to the buyer. This is where you make sure you keep all the information in writing and make sure you can fight for the EMD if needed.

No Reason/Buyer Walks Away: Sometimes a buyer just walks away. There are times when for reasons no one understands, after the expenses of inspection, appraisal and other costs are spent, the buyer just decides they no longer want the house or to close.

This is when the EMD is usually given to the seller. When the mutual release or whatever form your state or board use, the seller should be the one to receive the EMD. Again, this can be a fight to get at times. All parties must agree as to where the EMD is going.


These are just a few examples of where and how deals fall apart. These examples are the ones most often dealt with in a real estate transaction. Real estate is a process, with legal documents and many parties. Navigating it is never the same.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at  info@josephwalterrealty.com 

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.