What can cancel a home sale after an offer is accepted?
A signed contract can still fall apart before closing. Financing, inspection, appraisal, title and insurance can each give a buyer a way out.
October 7, 2026 · 6 min read
An accepted offer starts the contract period. It doesn't make the sale final.
Between acceptance and closing, the buyer may still have conditions that need to be met. The loan has to come together. The inspection and may raise questions. The has to be clear enough to transfer, and the buyer may need before the lender will fund the .
Whether any of those problems lets the buyer cancel comes back to the .
Recent reporting also suggests more contracts are ending before closing. Real Estate News reported a 13% contract cancellation rate on October 1, 2026, the highest level since 2022.
More contracts are being canceled
Real Estate News reported on October 1, 2026 that 13% of contracts were being canceled, citing a weekly update from Compass Chief Economist Mike Simonsen. The same update showed pending sales 6.1% below a year earlier for the week.
Realtor.com measured pending sales differently and reported a 4.1% year-over-year decline in September. Those figures cover different periods and use different methods, so they don't need to match.
Mortgage rates were also rising. Freddie Mac's average 30-year fixed rate went from 7.03% to 7.28% for the week ending October 1, a 25 basis point jump and the largest weekly increase since October 2022. The Mortgage Bankers Association reported purchase applications down 14% from a year earlier for the week ending September 25.
Those figures provide context, not an explanation for any particular canceled sale. A mortgage rate moving higher does not itself cancel a contract.
For an individual seller, the contract is what matters. What happens after accepting an offer lays out the deadlines that usually come between acceptance and closing.
Common ways a signed contract ends before closing
Most of the situations below involve a contingency. A is a condition written into the purchase agreement that has to be satisfied for the deal to keep moving.
The National Association of says contingency deadlines should be clear. Missing one can change what either side is allowed to do. The exact terms vary by contract and state.
The buyer's financing falls through
A financing contingency can let the buyer cancel if they cannot get the required loan within the period set by the contract.
That doesn't mean every financing problem automatically ends the sale. Once the has passed, the purchase agreement determines what happens next.
A cash offer usually doesn't include a mortgage at all.
The inspection finds a problem
An inspection contingency gives the buyer time to inspect the property and decide how to respond to what they find.
Depending on the contract, the buyer may ask the seller to make repairs, ask for a credit or price change, accept the property as it is, or cancel.
The deadline matters. Many contracts require the buyer to send notice in writing before the inspection period ends.
The appraisal is too low
A lender's appraisal may come in below the agreed purchase price. If the contract has an appraisal contingency, that can give the buyer a right to cancel or reopen the price discussion.
A low appraisal doesn't always end the sale. The seller may lower the price, the buyer may bring more cash to closing, or the two sides may find another way to cover the difference.
Some buyers agree in advance to cover an appraisal gap up to a certain amount.
A title problem can't be cleared
The may uncover a , an ownership problem, a boundary issue, or another claim that needs to be resolved before the home can transfer.
Many contracts give the seller time to clear those problems. If the title can't be made acceptable under the contract, the buyer may have a right to cancel.
The usually handles much of this work, along with title insurance.
The same closing period is when scammers are most active. The warning signs of real estate wire fraud are worth knowing before any money moves.
The buyer can't get insurance
Mortgage lenders normally require the buyer to have homeowners insurance in place before closing.
If the property can't be insured, or the available coverage costs much more than the buyer expected, the financing may be affected. Whether the buyer can cancel because of that depends on the financing terms and any insurance provisions in the contract.
The buyer's current home doesn't sell
A home sale contingency makes the purchase depend on the buyer selling their existing home.
If that sale hasn't happened by the contract deadline, the contingency may let the buyer cancel.
Both sides decide to end it
Sometimes neither side has a straightforward contractual right to cancel, but they both agree that the sale should end.
That is commonly handled with a written release. The release can also say what happens to the .
What happens to the earnest money?
Earnest money is the buyer's deposit, usually held by a third party while the sale is .
Where that money goes after a cancellation depends on why the contract ended, what the purchase agreement says, and state law.
- A buyer who properly cancels under an active contingency commonly gets the deposit back.
- A buyer who walks away after the relevant deadlines, or for a reason the contract doesn't allow, may risk losing it.
- If the buyer and seller disagree over who is entitled to the money, the title company, holder, or attorney may keep holding it until the dispute is resolved or a court directs its release.
The purchase agreement usually identifies who holds the deposit. A real estate attorney in your state can explain what the contract allows when the parties disagree.
Why the contract dates matter
Almost every cancellation right above has a deadline attached to it.
There may be a date for the inspection response, another for financing, another for the appraisal, and another for title. Some periods last only a few days.
That makes the calendar part of the contract, not just an administrative detail. Sellers often keep the major dates in one place so they can see what has passed and what is still open.
Contingencies are also worth looking at before you choose an offer. If you're comparing more than one, you can compare offers side by side and see which conditions and deadlines come with each one.
Can a buyer cancel after the offer is accepted?
Often, but not whenever they want. A purchase agreement may give the buyer a right to cancel under financing, inspection, appraisal, home-sale, or other contingencies, each with its own conditions and deadline. A buyer who cancels within one of those periods and follows the contract's notice requirements may be exercising a right already written into the agreement. The exact rules depend on the contract and state law.
Can a low appraisal cancel the contract?
It can if the contract includes an and the buyer is still within that contingency period. A low appraisal doesn't automatically end the deal. The price can be renegotiated, or the buyer may decide to bring additional cash. A contract without an appraisal contingency, or one in which the buyer agreed to cover an , can work differently.
Can a seller keep the earnest money if the buyer cancels?
Sometimes. A buyer who properly cancels under a contingency commonly receives the earnest money back. A buyer who walks away without a contractual right to do so may risk forfeiting the deposit. Who receives the money depends on the purchase agreement and state law, and whoever holds it generally needs the required instructions or legal authority before releasing it.
Does an accepted offer mean the sale is final?
No. An accepted offer creates a signed contract, but the sale still has to make it through the contract period and closing. NAR's Pending Home Sales Index counts signed contracts, and cancellation data shows that some never become completed sales. The transaction is completed at closing. Until then, the contract's conditions and deadlines still matter.
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