If you’ve been following the real estate headlines lately, you may have noticed that buyers across the country are walking away from signed contracts at an unusually high rate. According to Redfin, roughly 56,000 U.S. home-purchase agreements were canceled in August alone — equal to 15.1% of all homes that went under contract that month, the highest August figure in records going back to 2017. That’s a trend worth paying attention to, especially if you’re thinking about selling your home in San Pedro or the South Bay. The good news: in the Los Angeles market, cancellations actually declined slightly compared to the year prior. And more importantly, the single biggest reason deals fall apart is something sellers here have every opportunity to get ahead of before it ever becomes a problem.
The #1 Dealbreaker: What Comes Up in the Inspection
In a survey of 443 Redfin agents asked why their deals fell through, a full 70.4% cited home inspection or repair issues as the cause — far ahead of buyer financing falling through (27.8%) or a buyer being unable to sell their existing home (21%). The inspection contingency has become the primary pressure point in today’s more balanced market. Why? A few years ago, during the pandemic-era frenzy, buyers were waiving contingencies just to get their offers accepted. Today’s buyer has more options and more leverage. If a home feels like it could be hiding expensive surprises, many will simply move on to the next listing.
The issues that most commonly concern buyers include roofing problems, plumbing deficiencies, outdated electrical, non-functioning HVAC, pest or termite damage, mold, and foundation concerns. To a buyer, these aren’t cosmetic issues — they represent financial unknowns, and that uncertainty can kill momentum even in an otherwise strong transaction. In our coastal communities, buyers and their inspectors tend to pay particularly close attention to any signs of drainage concerns, foundation shifting, or deferred maintenance that our marine climate can accelerate. Sellers who address these items proactively are in a much stronger position.
Getting Ahead of It: The Case for a Pre-Listing Inspection
One strategy worth serious consideration in the current environment is a pre-listing inspection — hiring a licensed inspector to evaluate your property before it hits the market, the same way a buyer’s inspector would. This gives you the opportunity to address significant issues on your own timeline rather than scrambling under the pressure of an open escrow.
A pre-listing inspection doesn’t mean you have to fix everything. The smartest approach is a strategic one: address the items most likely to concern buyers or lenders, disclose the rest transparently, and price accordingly. The goal isn’t to present a perfect home — it’s to present an honest one that buyers can confidently move forward on. When buyers uncover unexpected issues mid-escrow, negotiations get messy fast. Getting ahead of that dynamic leads to cleaner transactions and fewer headaches for everyone involved.
No two homes are the same, and no two sellers are in the same situation. The right repairs to prioritize in an older San Pedro home built in the 1960s are different from what matters in a newer home in Rancho Palos Verdes. A local agent who understands what buyers in each neighborhood expect — and what lenders typically flag — can help you figure out exactly where to focus. If you’d like to talk through how to prepare your home for the market, reach out to us anytime.
Mike Harper and Peter Hazdovac are both licensed Realtors® and co-owners of HH Coastal Real Estate, an independent local brokerage. For more info, visit www.hhcoastal.com.
