Homeowners

Home Sellers Beware: 5 Hidden Deal Killers That Can Derail a Home Sale

Most home sellers want to move from an offer to the closing table as seamlessly as possible. However, deals can fall apart, even at the last minute.

What kills many deals are issues no one saw coming and sometimes didn’t even know were possible. This is often extremely disruptive for sellers, who may be counting on selling their homes to be able to buy their next ones.

It can also affect their bottom line. Once a deal falls through, and the home is sitting on the market longer, they may also need to cut the price, sometimes multiple times, to secure a sale.

“Deals that fall apart rarely collapse because of the ‘big issues,’” said Itay Simchi, founder of Ohio’s Proven House Buyers. “It’s usually the small, unexpected things that blindside sellers and stop a closing cold.”

Here are the top hidden deal killers that can quietly sabotage a sale.

1. Deal killer: Square footage discrepancies

One of the first things buyers scan in a listing is the square footage.

“In the beginning of my real estate career, I dealt with a home that was originally marketed as 1,950 square feet,” said Jessica Robinson, co-owner of Family Nest North Central Florida. The firm helps clients downsize and assists with senior relocations and cleaning out homes.

“Surprisingly enough, the appraisal came in at 1,720 square feet, creating a 230 square foot discrepancy,” said Robinson. “This lowered the home’s value by roughly $18,000, a price the buyer didn’t have the cash to cover.”

The sellers and buyers were unable to renegotiate a new sale price, so the deal fell through.

“If your square footage is wrong, so is your price, and it will be discovered at some point,” said Robinson. “A contract dissolving over a preventable error is not a good feeling.”

The takeaway: Sellers should verify their home’s square footage before the home is listed. An incorrect number can sink an appraisal, collapse negotiations, and unravel a deal that was otherwise on track.

2. Deal killer: Missing paperwork

Not holding onto paperwork, however minor, can also torpedo a closing.

“I was helping a family member at their closing,” said Mario Serralta, a lawyer at Mario Serralta & Associates and a certified public accountant. “The home inspection revealed previous water damage repair in an attic that had been fixed years earlier, but the seller hadn’t kept any paperwork to prove it.”

Even though the attic was repaired, the absence of documentation gave the buyer’s lender pause.

“This ultimately caused the buyer to walk away from the deal,” said Serralta. “A small folder with repair receipts, service records, and warranties can make all the difference at the last minute in a sale falling through.”

The takeaway: Clear repair records reassure lenders and buyers that a home has been properly maintained and that no hidden risks are lurking behind the walls.

3. Deal killer: Incomplete permits

A surprisingly persistent deal killer is work started under a permit that was never properly completed and closed out.

“One seller’s old patio project [permit] hadn’t been closed out with the city,” said Serralta. “By the time the seller had tried to resolve it, the buyer decided not to risk inheriting the problem by walking away.”

Simchi had a similar experience buying a home where the seller had converted a covered porch into a bedroom without pulling permits.

“Everything looked solid during the initial walk-through,” he said. “But once the appraiser reviewed it, the lender flagged the room as ‘unpermitted living space.”

As a result, the lender would not finance the property unless the seller brought it to code or removed the addition entirely.

“The seller couldn’t afford either option and the deal fell apart right there,” said Simchi.

The takeaway: Sellers should always confirm that permits are not only pulled but formally closed. Unresolved or undocumented work shifts risk to the buyer. Many will walk rather than inherit a potential regulatory headache.

4. Deal killer: Unclear financial obligations

Proper financial documentation is one of the most powerful protections a seller can have.

“As a CPA, I’ve seen thousands of financial and property documents over the years,” said Serralta. “Buyers are nervous when they don’t understand something (laws or financials) that seems ‘off,’ especially when it comes to HOAs.”

One example involved a property in a homeowner association. The deal fell through when the seller could not adequately explain a planned special assessment or provide straightforward information about the HOAs reserves. Special assessments typically increase dues temporarily to pay for improvements. 

The takeaway: Sellers should be prepared to clearly explain HOA finances, upcoming special assessments, and any outstanding financial obligations associated with the property.

5. Deal killer: What can slow down a deal

Small clerical errors can also freeze a transaction instantly.

“I once had a closing delayed two weeks because the seller owed $187 for an old streetlight assessment from the early 2000s,” said Simchi. “They didn’t even know the city still had it on record. The title company won’t close until every last cent is cleared. So, even tiny numbers can impact the entire deal.”

Another deal nearly collapsed due to a name mismatch on a decades-old deed.

“The seller’s last name was misspelled by one letter,” said Simchi. “It took four days, two affidavits, and a notary just to prove they were the same person.”

The takeaway: The best thing is for sellers to do their due diligence throughout the selling process.