Cancellations Hit a 3-Year High: 3 Scripts to Set Seller Expectations Now

Fourteen percent of U.S. home purchase agreements fell apart in July, the highest cancellation rate in nearly three years, according to a new Redfin analysis.

Not something any seller wants to hear. For a lot of them, a signed contract feels like it should be the finish line. Time to pop the champagne. Right now, though, in some markets more than others, it works more like the start of a high-stakes countdown. 

Buyers have leverage, and they’re using it. An inspection finding or a low appraisal can turn into a reason to walk, or a bargaining chip to renegotiate the price.

Here’s why cancellations are climbing, where they’re worst, and three scripts you can use at your next listing appointment to set the right expectations before a home goes live.

Why Home Purchase Cancellations Are Climbing

The national cancellation rate climbed to 14% in July, up from 13.7% in June and the highest mark since November 2023, when it hit 14.1%.

The rate has moved in a narrow band for four years, from about 13% to about 14%. The 2021 seller’s market saw an 11% cancellation rate, three points below today’s national average.

The reason comes down to buyer leverage:

• The number of active U.S. homebuyers dropped to a record low in July.
• Sellers outnumber buyers by 51%, near a record.
• Buyers are using inspection findings and low appraisals as reasons to walk away or ask for concessions.

High prices and elevated mortgage rates leave buyers little room for surprises. Any of these can end a deal when buyers believe another home will come along:

• An unexpected repair bill
• A change in financing costs
• A case of cold feet

This is something you want your sellers to be aware of before they list.  

Where Cancellations Are Highest and Lowest

Cancellation rates differ by metro, and the difference comes down to who holds power in each market. 

The highest cancellation rates are concentrated in buyer-friendly southern markets, with Detroit and Denver joining the top ten:

1. Atlanta, GA: 19.8%
2. Houston, TX: 19.6%
3. San Antonio, TX: 18.7%
4. Las Vegas, NV: 18.6%
5. Orlando, FL: 18.2%
6. Fort Worth, TX: 18.1%
7. Tampa, FL: 18.0%
8. Detroit, MI: 17.3%
9. Jacksonville, FL: 17.3%
10. Denver, CO: 17.2%

These metros were popular relocation spots during the pandemic, when low rates and remote work pulled buyers toward more affordable places to live. A few factors have piled up:

• Higher costs of living
• A large supply of newly built homes
• A rise in natural disasters

The result: more homes sitting on the market, and more room for buyers to negotiate or walk away. Houston stands out with 130% more sellers than buyers, among the widest imbalances in the country. 

The lowest cancellation rates land in a mix of tight coastal and Northeast markets:

1. Nassau County, NY: 3.5%
2. San Francisco, CA: 4.1%
3. San Jose, CA: 6.5%
4. Montgomery County, PA: 7.3%
5. Milwaukee, WI: 7.7%
6. New York, NY: 8.2%
7. Newark, NJ: 9.1%
8. Oakland, CA: 9.3%
9. Minneapolis, MN: 10.3%
10. Boston, MA: 10.9%

Limited inventory in these markets gives buyers fewer alternatives and more incentive to see a deal through. Nassau County and Montgomery County are two of just six markets nationally that Redfin classifies as true seller’s markets.

San Francisco is a case of its own: AI company salaries and bonuses have fueled the local housing market, and buyers who get under contract there tend to follow through.

That’s the split nationally and by metro. Next: exactly what to say to a seller who’s fixed on a number, plus three scripts to bring into your next appointment.

The Play for Agents: Prep Sellers at the Listing Appointment

This data gives agents a reason to have a harder conversation with sellers before the sign goes into the yard.

A few ways to bring this into the listing appointment:

• Bring up the national cancellation rate with sellers who are fixed on a specific price or timeline.
• Walk through likely concessions before an offer is on the table.
• Set the expectation that a fallthroughs happen, and can be unrelated to any flaw in the home.

One way to put the pacing into practice: run the conversation through BAMx Script Advisor to build language that fits your voice. Sellers respond better to a number and a plan than a general warning that the market has changed.

Here are a few examples to use as talking points with your sellers at the next listing appointment: 

Sample script 1:

“Before we talk price, I want to share something most agents skip. Nationally, 14% of homes that go under contract right now fall apart before closing. That’s the highest rate in almost three years. The difference comes down to one thing: how many options does the buyer have? Here in [Your Market], buyers are canceling at a rate of [local rate].  That tells us exactly how we need to price and prepare to get you to the closing table.”

Sample script 2:

“Before we go live, I want to walk you through one thing that most agents won’t tell you. Right now, 1 in 7 homes that goes under contract nationally falls apart before closing. In [Your Market], it’s closer to [1 in X]. Buyers have options, they know it, and they’re using inspections and appraisals as leverage. So the way we price and prepare this home upfront isn’t just about getting an offer. It’s about getting to the closing table.”

Sample script 3:

“Here’s what changed. Active buyers just hit a record low nationally. Sellers outnumber buyers by 51%. That means the buyer sitting in your living room knows another home is coming. They have options. And when buyers have options, they use inspection findings, appraisals, and financing hiccups as exit ramps.”

Backed by data, a conversation with scripts like these is what separates a smooth close from a second round of negotiations three weeks in. 

It also separates you as the agent who’s bringing them clarity on the market and their options for pricing, so they know what to expect before they list. 

BAMx members are practicing scripts like these live every week in the live Roleplay Masterminds and getting real-time feedback from Byron Lazine, Lisa Chinatti, and Tom Toole, all of whom run the leading real estate teams for their respective markets. 

Between the weekly masterminds, members have 24/7 access to the Script Advisor, built on those roleplays and updated every week. 

Sign up here for instant access.