Real estate contracts fall through for four main reasons: unresolved HOA or condo document review periods, issues uncovered during the home inspection, an appraisal that comes in below the contract price, and financing that falls apart before closing. I’m Kevin Grolig, a real estate agent with Compass in Bethesda, Maryland, and even in a hot market here in Montgomery County, I still see deals go sideways for these same four reasons over and over. The frustrating part is that almost all of it is preventable if you know what’s coming. A contract falling apart is stressful for everyone. Sellers just want to move forward with their next chapter, and buyers are excited about a home they’ve already started picturing themselves in. Nobody wins when a deal collapses. Below, I’m walking through each of these four risk points so you can spot them early, whether you’re buying or selling, and keep your transaction on track from ratification to settlement.
Why do HOA and condo documents cause contracts to fall through?
HOA and condo documents cause contracts to fall through because Maryland gives buyers a built-in escape hatch tied to how fast those documents get delivered. It’s the seller’s legal responsibility to hand over updated HOA or condominium documents once a home is under contract, a packet that includes rules and regulations, covenants, bylaws, budgets, resale certificates, and any recent amendments. Once a buyer receives those documents, the clock starts on a review period, five days for HOA communities and seven days for condos. During that window, a buyer can walk away from the contract for any reason at all. They don’t owe an explanation, they just have to cancel in writing. It’s an easy, no-penalty exit for a buyer who gets cold feet or doesn’t like something in the paperwork.
Here’s the part sellers often don’t realize until it’s too late: the clock doesn’t start when you request the documents, it starts when the buyer receives them. If it takes your HOA or management company two to three weeks to produce that packet, you’ve handed the buyer a much longer window to reconsider. Order your HOA or condo documents the moment you’re thinking about listing, not after you’re under contract. Closing that one paperwork bottleneck removes a loophole that has nothing to do with a buyer’s interest in your home and everything to do with timing.
Why does the home inspection cause deals to collapse?
The home inspection causes deals to collapse when buyers are blindsided by costly repairs or feel like something was hidden from them. Buyers get anxious when an inspection report comes back with a long list of future expenses, an aging roof, an old HVAC system, or plumbing that needs attention. Some of that is unavoidable in an older home, but much of it is manageable if it’s addressed before the home ever hits the market. A good agent walks a seller through likely inspection findings ahead of listing so there are no surprises later.
The other half is disclosure. Maryland sellers are obligated to disclose known defects, and buyers hate surprises far more than they hate a known issue with a plan attached. Being upfront about a property’s condition, paired with either repairs or a credit, keeps buyers confident instead of spooked. Deals rarely fall apart over a problem itself, they fall apart over a problem that feels hidden.
Why do appraisals cause contracts to fall through?
Appraisals cause contracts to fall through when the appraised value comes in below the agreed purchase price and the buyer can’t or won’t cover the gap. This is the part of every transaction that makes agents sweat, because you have very little direct control over the number the appraiser lands on. What you can control is the appraiser’s experience with your home. Make access easy, keep the property clean and clutter-free, and put together a simple spreadsheet listing recent updates with a value attached to each one. That documentation, combined with strong comparable sales your agent provides, gives the appraiser what they need to support a value that matches your contract price. Plats, floor plans, and other supporting paperwork help too.
The other piece worth understanding, especially with multiple offers, is that not every buyer is equally protected against a low appraisal. Look past the top-line price and consider who has the liquid cash to cover a gap if one comes up. In many of today’s multiple-offer situations, buyers are voluntarily negotiating the appraisal contingency out of the contract entirely, which tells you a lot about how serious and well-qualified they are.
Why does financing cause real estate deals to fall apart?
Financing causes deals to fall apart because the lender, not the buyer or seller, makes the final call on whether the loan funds, and that’s completely out of your hands as a seller. It’s often the trickiest of the four risks because you can’t see behind the curtain of a buyer’s financial picture the way an appraiser or inspector shows you their findings in a report. That’s why, when reviewing multiple offers, the highest number on paper shouldn’t be your only consideration. Look at who’s the strongest qualified buyer: who has more liquid cash reserves, stronger financial backing, and a track record that suggests their loan will actually close.
I see high offers from minimally qualified buyers more often than people expect, and that’s fool’s gold if the financing doesn’t hold up. In this market, plenty of confident, well-qualified buyers are willing to release their financing contingency altogether, a strong signal of how serious and prepared they really are.
FAQ
Can a buyer really cancel a contract for any reason during the HOA review period?
Yes. In Maryland, during the five-day HOA or seven-day condo review period, a buyer can terminate the contract at their sole discretion and doesn’t have to state a reason, as long as the cancellation is in writing.
How can sellers avoid losing a buyer during document review?
Order your HOA or condo documents as early as possible, ideally before listing, so the review clock starts and ends quickly rather than dragging on for weeks while the buyer has an open exit.
What can a seller do if the appraisal comes in low?
Prepare the home well for the appraiser, provide a spreadsheet of recent updates with values attached, and lean on your agent for strong comparable sales. Beyond that, prioritize offers from buyers with the liquid cash to cover an appraisal gap if one comes up.
Does a higher offer always mean a safer deal for a seller?
No. A high price from a minimally qualified buyer can be riskier than a slightly lower offer from a buyer with strong financing and cash reserves. Financing and appraisal risk should factor into which offer you accept.
What’s the single biggest thing sellers can do to prevent a contract from falling through?
Get ahead of paperwork and disclosures early: order HOA/condo docs immediately, disclose known defects upfront, and prep your home before it’s inspected or appraised. Most of these four risks shrink dramatically with early preparation.
Contracts fall through for predictable reasons, and predictable problems can be prepared for. Whether you’re buying your first home in Montgomery County or selling one you’ve lived in for years, the goal is the same: get ahead of these four risk points so your deal closes without drama. If you’re getting ready to buy, check out myguide to buying a home. If you’re thinking about selling, start with myguide to selling a home. And if you have questions about your specific situation,contact medirectly, I’m happy to walk through it with you.
Ready to talk through your contract questions? Book a free 30-minute call with me here.
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