What Happens if My Buyer Backs Out Before Closing?

By Katie Taylor & James Goodman

With a combined 30 years of experience in the real estate industry, Katie and James lead the Goodman Taylor Team, one of the top-performing teams in the Greater Phoenix area.

They’re every agent’s nightmare. The inspections are done, the financing is approved, the closing dates are set, and then your buyers suddenly back out. You’ve spent weeks guiding the deals, your sellers have already packed, and now everything comes to a halt. When this happens, emotions run high. Buyers panic, sellers feel blindsided, and you’re the ones everyone turns to for answers. Knowing exactly what to do next separates experienced agents from the rest.

Here are four simple tips to help you navigate buyer cancellations:

1. Start with the contracts. The first step is to review the purchase agreements. Everything depends on where the buyers are in their contingency timelines. If they’re still within their inspection, appraisal, or financing periods, they may be entitled to walk away and recover their earnest money deposits. Once those contingencies have been removed, however, they risk losing the deposits and, in some cases, exposing themselves to legal action from the sellers. Your job is to be familiar with those deadlines and communicate them clearly to all parties before the issues escalate.

2. Help your sellers regain control. For your sellers, these situations feel personal. They’ve invested time, emotion, and plans into their moves. The best thing you can do is guide them back to stability. Start with documentation: ensure cancellation forms and escrow instructions are signed quickly to avoid confusion. Then, focus on next steps, whether that means activating backup offers, re-listing the properties, or adjusting the strategies for faster turnarounds. Your calm leadership here can turn frustrations into trust.

3. Spot red flags before it’s too late. You can often see these situations coming. Buyers who hesitate to schedule inspections, avoid lender calls, or keep asking about “what if” scenarios usually have doubts. Reaching out early, discussing their concerns, and maintaining close communication can help prevent last-minute cancellations.

4. Build systems that protect your deals. Every deal that falls apart is an opportunity to tighten your processes. Strengthen your pre-approval verifications, enhance your buyer communication checkpoints, and establish clear expectations from the outset to ensure seamless processes. Preparation gives you leverage when emotions rise.

When buyers walk away, it’s not the end; it’s an opportunity to demonstrate the kind of professionals you are. How you guide your clients through tough moments defines your reputation far more than easy closings ever could. Deals can collapse, but they don’t have to define your business. The keys are preparation, communication, and calm, informed approaches.

If you want to strengthen your processes for handling cancellations or build systems that prevent them altogether, feel free to reach out for a free consultation. We’re happy to share what’s worked for us.