Deal Breakers Under Contract: Avoid These Common Pitfalls

You finally got the call—your offer was accepted. You're under contract on your new home in San Angelo, and the paperwork is signed. Everything's great now, right?

Not so fast. Between that moment and closing day, quite a bit still needs to happen. A home inspection, appraisal, financing approval, title search, insurance clearance, and various contingencies all stand between you and the keys to your new place. For buyers, this period can feel nerve-wracking. For sellers, it's equally stressful. One wrong move or one unexpected discovery can send months of planning into chaos.

The reality? About 6% of contracts are terminated, and there are clear reasons why. As your local real estate expert in San Angelo, I've seen deals collapse hours before closing—and I've learned how to prevent it. Here are the biggest deal breakers that can sink a sale and what you can do to keep your transaction on track.

Foundation and Structural Issues: The Ultimate Deal Breaker

Foundation issues sit at the top of the deal-breaker list for good reason, partly because repairs are typically not covered by homeowners insurance. When a home inspector discovers serious foundation problems, it sets off alarm bells for everyone involved.

Horizontal cracks, stair-step patterns in brick or block walls, or cracks wider than a quarter-inch often point to structural movement. These aren't cosmetic concerns. Once the issue is significant enough to appear in the inspection report, it has the potential for five-figure repairs that often involve lots of digging.

What to do: If you're buying, get a structural engineer to evaluate any foundation concerns before walking away. If you're selling in San Angelo, consider a pre-listing inspection. It's better to know about these issues ahead of time than to have them derail a deal mid-transaction.

Water Damage and Mold: The Hidden Nightmare

Water damage is one of the most common and costly home inspection red flags. Evidence of moisture can signal deeper structural concerns, including foundation damage, improper grading, or compromised drainage systems.

Mold is particularly problematic. Moisture creates the conditions for mold growth. While some surface mold may be manageable, extensive or hidden mold can present health concerns and require professional remediation. Many buyers simply won't proceed if mold is discovered.

What to do: Look for signs of water damage during your walkthrough—stains on ceilings, musty odors, soft flooring around toilets or under sinks. If you're the seller, address any drainage issues around your foundation and repair roof leaks before listing. If you're the buyer and water damage is discovered, hire a professional to assess the extent before making your decision.

Roof Problems: A Costly Issue

In some cases, repairs may be relatively minor, such as replacing flashing or damaged shingles. In others, a full roof replacement may be necessary—a significant expense for any buyer. Roofs usually last between 25 and 30 years. If the roof is approaching the end of its lifespan, missing or curled shingles could be a bellwether that the end is near and a new roof will be needed soon.

Appraisers and inspectors carefully examine roofs because they know this is a major expense that can't be deferred. A roof that's nearing replacement can kill a deal, especially if the buyer's budget is tight.

What to do: If you're selling, know your roof's age. If it's over 20 years old, be prepared to negotiate or replace it. If you're buying and the roof is aging, factor replacement costs into your decision or ask the seller to handle it.

Electrical and Plumbing Issues: Safety First

Faulty wiring and outdated electrical panels can be dangerous. Inspectors check the breaker panel and test outlets and ensure the system is up to code. Repairs can range from $2,000 to $11,000, but addressing electrical issues is crucial for safety and insurance compliance.

Plumbing problems are equally serious. Major repair or replacement of bad plumbing and piping can range from $5,000 to $50,000. Weak water pressure is a sign of piping issues or a lack of water volume. Leakage is a major concern, with signs including stains under sinks and on the ceiling or soft flooring around toilets, dishwashers, or ice makers.

What to do: These aren't items to ignore or underestimate. Get quotes from licensed professionals. If you're the seller, making these repairs before listing can prevent deal-killing negotiations later.

The Appraisal Gap: A Modern Challenge

According to a 2024 Zillow survey, 52% of buyers said their final offer was contingent on the home appraising at a minimum amount, and 23% of sellers said at least one of their offers fell through because the appraisal was lower than the purchase price.

Mortgage lenders don't want to lend more money than the appraised value, which may cause the buyer to back out of the deal. When a home appraises below the agreed purchase price, the buyer can't secure full financing—and unless someone's willing to cover the gap, the deal stalls.

What to do: As a buyer, understand that if there's an appraisal contingency in the purchase agreement and the appraisal comes in low, you can back out of the sale with no questions asked and without losing the earnest money deposit. As a seller, work with your agent to price competitively from the start. In San Angelo's market, accurate pricing prevents appraisal issues.

Financing Falls Through: The Number One Deal Killer

By far, the main reason why deals fall through is that buyers fail to get mortgage approval. Even with a pre-approval letter in hand, final approval isn't guaranteed.

If a buyer has been pre-approved and has a change in their status, such as difference in employment, new negative credit issue, accrual of additional debts, or a change in lender guidelines can cause the lender to cancel the financing. Something as simple as opening a new credit card or financing a car between offer and closing can derail approval.

What to do: If you're buying, avoid making any major financial moves during underwriting. Don't change jobs, take on new debt, or make large purchases. If you're selling, make sure your buyer is pre-approved (not just pre-qualified) and ask them to avoid major financial changes.

Title Issues: Legal Problems Hiding in Plain Sight

Unclear or disputed property titles can pause or prevent a sale. Issues like liens, boundary disputes, or unresolved ownership claims need to be cleared before the sale can proceed. A title search might reveal a lien from an unpaid contractor, a boundary dispute with a neighbor, or unknown heirs claiming stake in the property.

What to do: Title insurance protects you, but issues still need resolution before closing. Work with your agent to address title problems as soon as they surface.

Insurance Denial: An Often-Overlooked Problem

Sometimes buyers cannot secure homeowner's insurance due to property condition, location risks such as flood zones or claims history. Without insurance, mortgage approval is not possible. Homes in flood zones, with active damage, or with claims history can be denied coverage. Without insurance, the lender won't fund the mortgage.

What to do: Start the insurance application early. If you're in a flood zone or have a complex insurance situation, address it before making an offer.

The Inspection Contingency: What Buyers Actually Care About

Buyers are no longer rushing to remove contingencies. They are slowing down, reviewing reports carefully, and negotiating repairs with confidence. In 2026, home inspections are playing a bigger role in negotiations than they did in previous heated markets.

With higher borrowing costs compared to the ultra-low rate era, buyers are stretching further to afford their monthly payments. That leaves less room for unexpected repairs after closing. When budgets are tight, inspection findings carry more weight.

What to do: If you're selling, maintain your home proactively. Address deferred maintenance before listing. If you're buying and the inspection reveals issues, don't panic—remember that negotiation is always possible.

Missing Deadlines and Paperwork: The Silent Deal Killer

Sometimes deals fall apart not because of major issues, but because of simple oversight. Real estate transactions involve large volumes of documents and tight timelines. A delay in signing, submitting or processing paperwork can throw off the schedule and cause a breach of contract.

What to do: Stay organized. Respond quickly to your agent, lender, and attorney. Mark your calendar for all deadlines. One missed signature can unravel everything.

Buyer's Remorse: The Emotional Deal Breaker

For buyers, the entire home purchase process can be very emotional. They're investing a substantial amount of money in what they hope is their dream home. They have to live with the house and the community every day. And sometimes they just get cold feet.

What to do: Be absolutely certain about your decision before making an offer. Walk away if you're not emotionally ready, rather than getting stuck under contract with doubts.

How to Protect Your Deal

The good news is that 95% of pending home sales carry through to closing. Your deal doesn't have to be in that unfortunate 5% if you're proactive.

Work with a knowledgeable real estate agent who stays on top of deadlines and coordinates between all parties. A skilled real estate agent does everything possible to make sure your home sale doesn't fall out of contract. They keep hearing from the agent as the closing date draws closer. They stay on top of the deadlines and paperwork.

In San Angelo, the stakes are the same whether you're buying your first home or your fifth. Knowing what can go wrong helps you prepare to make things go right.

If you're under contract on a home and worried about potential issues, or if you're thinking about buying or selling in San Angelo, I'm here to help. I've guided countless buyers and sellers through the closing process and know how to navigate these deal-breaker situations. Reach out to discuss your transaction and how we can keep your deal on track through closing day.