1 in 3 SCV Escrows Are Canceling — Here's What's Really Happening

A third of Santa Clarita real estate listings in escrow right now are 
canceling. That's a level we have not seen in years and it's changing how 
sellers need to prepare a listing in May 2026.

In this episode I break down what's really causing the cancellations 
(spoiler: it's almost never the house), what you have to disclose to the 
next buyer once an inspection reveals issues, the buyer financing trap that 
kills most deals, and the one pre-listing move that takes the buyer's 
renegotiation leverage off the table before it ever starts.

If you are getting ready to list a home in Santa Clarita Valley or you just 
had a buyer back out, this is the episode.

I'm Connor MacIvor. Sellers Only Agent in Santa Clarita. Flat $17,000 fee. 
Twenty-three years LAPD. Twenty-seven years licensed.

List with me: SellersOnlyAgent.com

CA DRE #01238257. Sellers Only Agent™.

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Transcript

SPEAKER_00 0:00

A third of the real estate listings right now in Santa Clarita, as we get to May 9th, or today's May 9th of 2026, they're actually canceling escrow. That's a third of all the properties that go into escrow actually are canceled. What does that mean? A lot of people look at it as potentially being an issue with the property, maybe a conditional issue. Maybe the buyer during some inspection process found out that there were certain things with regard to the house that the seller is selling that they couldn't live with. Most likely that's not the case, actually. What ends up being the case more often than not comes down to maybe a buyer financing issue or maybe a buyer changing their mind issue. Not for the residents, but maybe the buyer's eyes are somewhere else. Maybe they've been looking for properties for a while and they've written offers and lost out on those offers. Another property that they're not super in love with, but they can work with comes onto the market. So they get excited, they go out, they write an offer, potentially because of their experience, they write an offer higher than they did in the past, at higher than even the list price of the property because they're tired of losing, they get it, and then they start seeing other properties come onto the market after they've done the negotiation, had the contract written, got seller agreement, entered into contract, they see other things pop on the market. So before they get to their inspections, and even after they get to their inspections, after they spent some money investigating the seller's residence, they say, you know, we're going to cancel. We're going to still get our deposit back because we haven't gone past the contingency removal time frame, and that's all negotiated up front, and they know that time, so they pull out. Now the seller has a property that goes back on the market. The advertising and marketing change for that as the agent. And I believe it's very important for the agents to be up front to the reason. If it is an issue with condition of the residence that was discovered by a home inspector, if that was the case, and if the seller has attended to that in some way, shape, or form, then that should be addressed. Once these things are discovered, for you sellers out there, once items are discovered because of buyer investigations, that now is required to be disclosed to every future buyer. So if this buyer decides to cancel, the next buyer that comes in, you've got to tell them this is the information. And you have to lay it out. It should be in writing, it should be via some kind of a report. If it happens to be an inspection-revealed issue, you have to tell the next buyer coming in. And if you're not going to change it, maybe the next buyer will accept it without an issue as is. Real estate in Southern California is sold as is. However, everything is negotiated up to negotiation. So even though it as is, the seller or the buyer could say, Well, I know I agree to it being as is. Even an extra is something that I signed, but I still want this repaired again. These are where properties happen to be in Santa Clarita now. We have a lot, a third of the properties that are going back onto the market. I mentioned a repair thing where the buyers get into trouble, and this is more a majority of it, they go out and they do some kind of purchase or they may change their credit profile so they no longer qualify for the residence. I don't represent buyers, I'm a seller's only agent, but on the buyer end of it, I represented buyers for over 21 years. For the last seven, I've been sellers only. However, with regard to you buyers out there, before you finance anything, before you go out there and even pay off a credit card, I don't care what it is, you want to make sure that you get your lender's approval before doing this. Now, if you're paying cash, who cares? But if you're using a lender and you're gonna need a loan to make the purchase of real estate, you want to make sure that you're completely in the clear and you have vetted that decision, whatever it is, let's say your aunt's gonna give you a few hundred bucks to go pay off that JCPenney card or whatever, you need to make sure your lender blesses it and don't do it over the phone. You can do it over the phone, but follow it up in an email and get a hard copy answer, something that's digital and that you can print out later to say, Well, you sent me this, you said it was okay. I even called you. Good luck proving that, but on the other end of it, I wrote you this email after the phone call, and you said, sure, pay it off all day long, no sweat, it's not gonna impact your purchase. And here you're telling me that it impacted my purchase, I can't purchase any longer. There's at least somebody to hold accountable. Is there your uh are you gonna be able to follow up that in some kind of a legal action? Well, you know, anybody can sue anybody for anything, so could be a possibility. Is there gonna be some compensation on the other end of it? Yeah. I think intent has to be proven, but again, not an attorney, so you should ask an attorney. But that's where the world is, so be wary with that. That's a lot of properties falling out. There's things that you can do as sellers to try to prevent it, but at the end of the day, the buyer changes their mind. If the buyer decides that it's not for them, if the buyer's uncle told them that, oh my God, you don't want to buy a house right now, what a horrible time, and they end up canceling because of that. You have to look at where the contract says they are with the removal of contingencies. If they've already done all that, then more than likely their deposits gonna become your property at some point if they've already gone past that date and signed all the proper documents and everybody was in agreement and they removed all of them. But that's kind of nuance, right? You got to make sure you know where they are, what they signed, and what the legal issues or the legal recourse you have is. And at the end of it, let's say they don't agree with giving up their deposit, even though they've already gone past the removal of contingencies time frame and filled out all the proper forms and then decided to cancel after that, after they've removed them all, yeah, you're gonna have a fight on your hands. And that's how that works. It's not a magic system that all of a sudden you get the 3% deposit or whatever agreed upon deposit was, you get that and it becomes your property just because they reneged on the deal. Not the way it works. Anyway, look at this, make sure that you read everything that's put in front of you. With DocuSign and these other digital forms of signing, digital ink, it's very easy not to read things. It's very easy just to click through a massive, uh, massive 30, 40-page contract and all the disclosures and just click, click, click, click, click. You signed, you're done, and then you go on about your life. Pause. Look at it and read it. One of the things that people ask, should I just take this and plug this into my my own Chat GPT or my Claude or my Grok or whatever it may be, and have them go through the contract and give me the highlights and points. It's public, folks. You put that stuff out there, it could be used as training material. Even if you make it so it's incognito and nobody's supposed to see it yet. That didn't work out so good for a couple different attorneys, and I believe somebody in the medical world. The information that they put out there was belonged to a client, and that information got them in trouble, and they shouldn't have done it. So, your personal private information, a real estate contract trying to deduce whether or not it's going to be good or bad, yeah. If you don't have your own private AI set up in your office on a sandbox computer where it doesn't get out, and it's your own installation of an open source large language model, 70 billion parameter or a quin or something of that nature, yeah, I wouldn't do it at all. That's that's good advice. Be careful with that. But, you know, you can read it and you can send an email to the agent. I don't understand this, would you explain it? I don't understand that, would you explain it? What are the things I should know about this? Uh if your agent uses AI to answer that, then you have more problems than I could imagine. But anyway, be careful when you get ready to list. It's really important that you do that pre-inspection if you can swing it. It's valuable. And I'll tell you what, buyers really don't have anything to go. And you know what it also does? It solves that riddle of buyers thinking that they're going to use the post-home inspection request for repairs or asking to try to get more money out of you because they went in knowing the condition of the residents. They went in with a home inspection report. And I'll tell you, you have a good home inspector on the seller's end of it. The home inspector for the buyer isn't going to come up with much more nonsense. You know, the systems are going to be paid attention to. If there's a chipped paint on the corner of an entry door, okay. Ooh wrah. We already saw that potentially. But those are probably going to be those only differences between the reports. The systems are going to be vetted and all of those things, and it really does help sellers perform at the highest level when you start to want to get your house listed for sale. Sellersonlyagent.com, I'm Connor. We'll see you in the next one. Thanks for watching.