By Lydia Hallay, June 26, 2024
Buying a home is one of the most significant decisions you’ll ever make, and the stakes are high. In today’s market, competition for desirable homes can be intense- and once your offer is accepted, it’s easy to become emotionally attached to the idea of a new life in your new home. However, sometimes, despite the excitement and effort put into a winning offer, walking away from a pending purchase is the best decision. Here are key scenarios where it might make sense to reconsider your decision.
1. Unresolvable Issues in the Home Inspection
A thorough home inspection is a critical step in the home buying process. If your inspection uncovers significant issues such as structural damage, outdated electrical systems, plumbing problems, or mold infestation, these can lead to substantial repair costs and potential safety concerns. While most issues can be resolved (either through seller repairs or concessions from the seller that make repairs possible after closing), major problems may not be worth the risk or expense. Key questions to consider are, “is the seller willing to negotiate?” and “are these issues ones I can address over time?” Your realtor will be your best guide on sussing out what’s possible- and, making sure that you are able to protect your earnest money if you decide to walk.
2. Appraisal Comes in Lower Than the Purchase Price
In Portland’s competitive market, bidding wars can drive prices up. However, if the home appraises for less than the agreed-upon purchase price, your lender may not approve the full loan amount. This means you’ll need to come up with the difference out-of-pocket, which may not be feasible. If the seller is unwilling to lower the price- or, you’re unable to bring extra cash to the table to bridge the gap- it might be wise to walk away. If you suspect a home you’re writing an offer on won’t appraise at value, work with your realtor on crafting an offer that offers protection against appraisal gaps. While most homes out there appraise “at value,” a low appraisal doesn’t always mean you need to walk. Your realtor can often gather additional information to help you appeal an appraisal and hold things together.
3. Title Issues
A clear title is essential for a smooth home purchase. If the title search reveals unresolved liens, disputes, or legal issues, these could become your responsibility after the purchase. Title insurance can provide some protection, but unresolved title issues can be a deal-breaker. Your realtor can help you determine whether a title issue is resolvable, or whether it makes more sense to bounce.
4. Financing Falls Through
Even with pre-approval, changes in your financial situation or the lender’s policies can cause your mortgage to fall through. Losing your job, acquiring new debt, or significant changes in interest rates can impact your loan approval. Without secure financing, proceeding with the purchase isn’t possible without an alternative plan. Be sure to keep your realtor (and your lender) abreast of any potential changes- that way, there’s time to try and pivot.
5. Neighborhood Concerns
After making an offer, you might discover issues with the neighborhood that weren’t apparent initially. This could include plans for undesirable developments or zoning changes that change livability or future property values. If the community doesn’t meet your expectations for safety, amenities, or future growth, reconsidering the purchase is prudent. Working with a realtor who is well-versed in the neighborhoods you’re shopping in is a great way to avoid problems from the start.
6. HOA Restrictions
If the home is part of a Homeowners Association (HOA), it’s crucial to review their rules and regulations. Excessive restrictions, high fees, or poorly managed HOAs can lead to ongoing frustrations and financial burdens. If the HOA terms don’t align with your lifestyle or budget, it’s a valid reason to walk away. Your realtor may suggest that you consult with an attorney as you are reviewing HOA documents.
7. Seller’s Non-Disclosure
If you discover that the seller has intentionally withheld important information about the property, such as past damage, renovations without permits, or neighborhood disputes, this breach of trust is a significant red flag. Full disclosure is essential for making an informed decision, and lack of it can justify backing out of the deal. It’s important to note that most sellers don’t know *everything* about the property they’re selling- so consult with your realtor if you have concerns about what’s been disclosed. Sometimes, it’s just an ordinary oversight on the part of a seller- and can be remedied with simple clarification paperwork. Other times, it’s more serious. Your realtor can help you sort the difference.
8. Personal Circumstances Change
Life is unpredictable. Job relocations, changes in family dynamics, or health issues can arise, making the purchase impractical. Personal well-being and stability should always come first, and sometimes that means delaying a home purchase. If you’re thinking of making a home purchase- let your realtor know of any potential life events that are on your radar. They can help you make informed decisions about how best to pivot, if pivoting is needed.
The Takeaway
Walking away from a pending home purchase isn’t a decision to be taken lightly. Sometimes, there are big financial consequences to bailing- including losing your earnest money or legal action from the seller for breach of contract. But sometimes- walking is the best course of action to protect your financial and personal well-being. Your realtor can help you evaluate options and guide you though the proper way to exit a transaction.
Buying a home is a big deal. Your realtor can help you conduct thorough due diligence, seek additional professional advice, and make decisions that protect your interests. The right home, free of significant issues and in a suitable neighborhood, will eventually come along. Remember, it’s better to wait for the right opportunity than to regret a rushed decision.
Have questions about the home buying process? Thinking of making a move? Reach out! I’d love to help you find your next Living Room.
Lydia Hallay
Principal Broker | OR
She/They
Calm, prepared, and people-first—Lydia brings a steady presence to what can be a high-stress process.
As a licensed Principal Broker, she leads Ello, a collaborative team within Living Room Realty known for its neighborly approach to real estate. Ello works with buyers and sellers who value thoughtful strategy, good design, and clear communication.
Lydia is consistently top-rated and ranked among the top 150 agents in the city, and is known for listings that sell faster than average (often with multiple offers), with distinctive, design-forward marketing that stops buyers in their scroll.Before real estate, Lydia spent 17 years as a union organizer and negotiator, advocating for worker rights, leading large-scale strategic leverage campaigns, and navigating complex contracts. That background shows up in her work today: calm under pressure, sharp in negotiations, and deeply attuned to the human side of big decisions.
With roots in the Sonoran Desert (she owns a vacation rental in Tucson), Lydia is an avid gardener, a devoted fan of Portland's food & small business scene, and loves hunting for secondhand/vintage gems. Lydia & her spouse (a longtime restauranteur & golf nerd) enjoy taking their vintage camper (named Puff the Magic Eurovan) for mini adventures. They live in a midcentury home in SE Portland with their dog (Maybelle) and two cats (Kenny & Caroline).
A lifelong advocate for social, economic, and housing justice, Lydia supports organizations doing on-the-ground work in the community. A portion of every paycheck she earns is donated to Taking Ownership PDX, which helps Black homeowners age in place and build wealth.
- T: 503-807-0156
- lydiah@livingroomre.com
