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.
About T. Kerr Property Group + Russ Phillips Team
T. Kerr Property Group + Russ Phillips Team is a Central Texas real estate team serving Georgetown, Round Rock, Austin, and surrounding areas. As a woman-owned team with veterans on the team, we are focused on helping people make smart, confident, and informed financial decisions through real estate. Our approach is rooted in integrity-first representation, strategic negotiation, and trusted local expertise. With 800+ five-star reviews, 2,500+ homes sold, more than $1 billion in production, and 65+ years of combined experience, we bring proven results to buyers and sellers across Central Texas. Our recognitions include Platinum Top 50, FOX 7 Austin, and the Austin Business Journal Residential Real Estate Award. T. Kerr Property Group has also been voted a top agent and team in Round Rock, won #1 team and agent for Georgetown Best through community voting, and ranks #1 in Williamson County and #2 in Travis County for listings sold and buyers represented, excluding builders. Local experts. Relentless advocates. Results you can verify.