And what Central Texas buyers and sellers need to know before making their next move

*While I am a licensed Realtor®, I am not acting as your Realtor. Every real estate situation is unique, so please consult a professional who can provide advice tailored to your needs.*

Contract cancellations are one of the most painful surprises in real estate. Most folks don’t even know they’re a thing until they’re staring at the termination notice in their inbox. Historically, only about four to five percent of pending home sales fall apart according to long standing NAR data. A few deals wobble, most go through, and the machine keeps moving.

But 2025 is rewriting the script. Nationally, contract cancellations are hovering around fifteen percent. Here in Central Texas, the rate is closer to twenty percent. That means roughly one in five deals that go under contract never make it to closing. For context, that’s nearly quadruple the historical baseline.

This shift is not theoretical. It’s happening in real time. We had a contract terminate today for reasons that would not have derailed a deal two or three years ago. The environment is different. Buyers behave differently when inventory is higher, carrying costs are steeper, and economic signals are all over the place.

Let’s break down why cancellations are rising and how buyers and sellers can protect themselves in a market where more deals are falling apart than we’ve seen in a decade.

Why more contracts are falling through in 2025

Buyers have more choices

Inventory in Central Texas has expanded significantly compared to peak pandemic years. With more options, buyers compare homes more critically and feel less pressure to stay committed if something doesn’t feel right. Zillow has repeatedly highlighted that choice impacts buyer behavior and leads to more renegotiation attempts and more withdrawals.

Contingent buyers are stuck in slower chains

In a slower market, one failed sale creates a chain reaction. If Buyer A can’t sell their home, Buyer B (the seller of the home they were trying to buy) is left stranded. A single shaky domino can collapse multiple contracts down the line.

Ownership costs have jumped

Insurance premiums in Texas have risen sharply in the last few years, and maintenance costs and utilities aren’t far behind. Once buyers see the full carrying cost on paper, some change their minds. The math feels heavier than it used to.

Economic uncertainty is pushing hesitation

Between rate fluctuations, inconsistent job reports, and general financial anxiety, even highly qualified buyers get cold feet. A purchase this big feels weightier when the outlook is unpredictable.

What this meansfor the Central Texas housing market

A spike in cancellations does not signal a market crash. It means we have a more level playing field. Buyers are cautious, sellers have to work harder, and the margin for sloppy preparation is basically zero.

This is a skill based market. Deals are not falling apart because homes are bad or because the market is weak. Deals fall apart because today’s environment requires more strategy, more communication, and more hands on management than the frenzied years that came before.

How to keep your deal from falling apart

Prep like it matters, because it does

If you are selling, preparation is everything.
Know the condition of the home.
Get ahead of repairs that could trigger objections.
Disclose what you need to disclose.
Make the home as move in ready as possible.

Buyers don’t want surprises. Surprises are cancellation fuel.

Work with real data, not guesses

Pricing too high without supporting market evidence instantly increases your cancellation risk. Homes that sit get renegotiated. Homes that are overpriced get cold feet buyers. Clean, realistic pricing protects your momentum.

Stay flexible and issue solve early

This does not mean sellers get taken advantage of. It means you listen, understand the buyer’s concerns, and negotiate where you can. Most cancellations are preventable with proactive communication.

Understand how the termination periods work

In Texas, buyers have an unrestricted right to terminate during the option period. If they cancel then, the earnest money is refunded to the buyer and the seller keeps the option fee. If a buyer terminates outside of the option period, the earnest money may be released to the seller depending on the contract terms and the reason for termination. Your agent should help you navigate the timelines and protect your position.

Buyer FAQ for 2025

Are contract cancellations normal right now

They are much higher than usual. National averages hover near fifteen percent. Central Texas is closer to twenty percent. Historically, the rate has been four to five percent. So yes, cancellations are elevated, but not abnormal for a rebalancing market.

Seller FAQ for 2025

How do I avoid a buyer backing out

Prep the home.
Know the condition.
Fix what will spook buyers.
Disclose transparently.
Be willing to negotiate on reasonable issues.
Give buyers confidence, and they will stay committed.

How do I choose a strong buyer

Look at lender strength, down payment, contingency type, timeline flexibility, and the buyer agent’s track record of closing deals. Even then, be prepared for surprises. This market tests everyone.

The real takeaway for 2025 buyers and sellers

Getting to closing is absolutely achievable, but it takes a smarter strategy than it did a few years ago. When cancellations are rising, experience matters. Communication matters. Preparation matters. And partnering with someone who has navigated hundreds of transactions is the difference between a deal that holds and a deal that collapses.

If you want clarity on how to protect your sale or strengthen your position as a buyer, we are here to walk through it with you step by step.

T. Kerr Property Group and the Russ Phillips Team are the number one team in Williamson County for listings sold and buyers represented and a top five team in Travis County for a reason. Their focus is simple: give clients the sharpest advice, the clearest guidance, and the kind of service that makes every step feel supported. Excellence is the standard, not the goal. That commitment has earned them some of the most respected accolades in the industry including PT50, ABJ Residential Real Estate Awards, features in Real Producers, and multiple Best in Round Rock and Best in Georgetown wins as voted on by the community. With more than 500 five star reviews and a reputation built on integrity, expertise, and genuine care, they remain one of Central Texas’s most trusted real estate teams.