How Often Do Buyers Back Out At Closing?

Buyers rarely back out at closing, but it does happen — and when it does, it can be stressful and costly for everyone involved.

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📊 Typical Back-Out Rates (U.S.)

Nationally, about 3% to 5% of home purchase contracts fall through before closing.
The rate is even lower for deals that make it all the way to closing day (often <1%).
The highest fallout rates usually happen during the contingency periods — not at the closing table itself.

❗ Common Reasons Buyers Back Out at or Near Closing

Financing Falls Through
- The buyer’s loan is denied late in the process (e.g., job loss, new debt, bad credit flag).
- Appraisal came in too low, and they can’t make up the difference.
Cold Feet
- Rare but possible: buyer simply gets nervous or changes their mind.
Legal/Title Issues
- A last-minute title issue arises that scares the buyer off.
Final Walkthrough Problems
- Home is damaged, vacant items are removed, or agreed repairs weren’t done.
- Buyer refuses to sign unless new terms are agreed to.
Life Circumstances
- Emergency (divorce, death, relocation, job offer rescinded, etc.)

🔐 How Sellers (and Agents) Protect Against Last-Minute Cancellations

Earnest money deposits: Usually 1–3% of the purchase price. If the buyer backs out for reasons not allowed by the contract, the seller keeps the deposit.
Shorter contingency periods: Limits how long the buyer has to walk away without penalty.
Pre-approvals and strong financing verification: Reduces financing risk.
“Time is of the essence” clauses: Enforces deadlines to keep the deal on track.

✅ Bottom Line

If your deal has made it to closing, the odds are overwhelmingly in favor of it finishing. But it’s smart to have a backup plan (like a backup offer or rental option) just in case.

Here’s a Buyer’s Closing Day Checklist to minimize the risk of walkaway and ensure a smooth closing. Whether you’re the buyer or seller, verifying these items helps catch problems early, before they derail the deal.

✅ Buyer’s Final Closing Checklist

🏦 1. Final Loan Approval (Clear to Close)

✅ Confirm mortgage is fully approved, not just pre-approved.
✅ Lock in the final interest rate.
✅ Lender confirms all conditions are met.

🔹 Tip: Ask your lender for a “Clear to Close” letter — that means underwriting is complete.

💵 2. Funds Are Ready

✅ Have certified funds or wire ready for closing costs and down payment.
✅ Double-check wire instructions directly with the title/escrow company (to avoid fraud).
✅ Confirm closing disclosure matches what you were told — review fees line by line.

🧾 3. Review the Final Closing Disclosure

✅ Compare it to the Loan Estimate.
✅ Look for:
- Changes in loan terms
- Unexpected fees
- Prepaid taxes/insurance
✅ Ask your agent or lender to explain any unfamiliar charges.

🏡 4. Final Walkthrough of the Property

✅ Schedule 24–72 hours before closing.
✅ Confirm:
- All agreed repairs were made
- Appliances and fixtures are in place
- No new damage or debris
- Home is clean and vacant (unless agreed otherwise)
✅ Bring your inspection report to compare items

🧰 5. Verify Repairs and Receipts

✅ Review repair invoices if the seller agreed to fix anything.
✅ Confirm that licensed professionals completed the work if required.

🖋️ 6. Paperwork and IDs

✅ Bring government-issued photo ID
✅ Bring proof of homeowner’s insurance
✅ Bring marriage license or trust documents (if needed for title)

📞 7. Communication Confirmed

✅ Know who will be at closing (agent, attorney, title officer, lender).
✅ Confirm exact time and location of signing.
✅ Confirm how and when keys and garage remotes will be delivered.

🔐 8. Title Insurance and Escrow Check

✅ Confirm the title is clear of liens or issues.
✅ Understand what’s covered by your owner’s title insurance policy.
✅ Make sure escrow instructions are clear and agreed upon.

⚠️ Bonus: Final Pre-Closing Triggers That Can Cause Delays

Avoid these right before closing:

❌ Making large purchases (e.g., furniture, car, credit card splurges)
❌ Switching jobs
❌ Moving large sums of money between accounts
❌ Missing a final document request from the lender

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