Falling out of escrow is never fun, and sadly, in today’s market, it’s happening more often—especially in Los Angeles, where fire risk and insurance challenges are making buyers more cautious.

We recently had three escrows fall through, each due to entirely unforeseen inspection concerns. Understandably, buyers have grown particularly skittish about high-fire-risk areas, and you can’t blame them — many homes were lost in nearby fires, and insurance companies have pulled out of California, making it much harder (and more expensive) to secure coverage.

Why Deals Are Falling Apart More Often

1. Fire Risk & Buyer Anxiety – Homes in high-risk zones face extra scrutiny. Buyers are nervous about both future fires and the skyrocketing cost of insuring a home in these areas. Sellers should clear brush before going on the market to minimize red flags and reassure buyers.

2. The Insurance Crisis – With major insurance providers leaving the state, buyers are scrambling to find coverage. One recent buyer had to patchwork-quilt together three separate policies just to get insured:

• Fire insurance through the California FAIR Plan, which often provides minimal coverage.

• A standard homeowner’s policy to cover what FAIR Plan won’t.

• Flood insurance—even in areas that historically didn’t require it.

3. Longer Timelines & Buyer Hesitation – Buyers are moving more cautiously. Getting insurance approvals and inspections takes longer, so agents must work as a team with the other agent, and be more patient before issuing notices to perform. Remember, this isn’t ‘business as usual’.

How Sellers Can Protect Their Deals

✅ Pre-Listing Inspections: The “Equity Protection Plan”
Encourage sellers to inspect before listing. Knowing potential issues upfront allows them to address repairs, price strategically, or prepare for negotiations—reducing the risk of surprises that send buyers running.

✅ Educate Sellers About the Realities of the Market
Falling out of escrow is happening more frequently now, and sellers need to understand why. Setting realistic expectations can prevent frustration down the line.

✅ Work With Creative Insurance Brokers
With traditional insurers leaving the state, it’s critical to have a go-to insurance expert who can help buyers find policies. Without proper coverage, many lenders won’t approve the loan, meaning no sale.

✅ Monitor Contingency Removal Dates Closely
Buyers are walking away more easily than before. Keeping a close eye on contingency periods ensures you’re ahead of potential fallout.

Agent-to-Agent Communication Is Key

A strong relationship between agents can make or break a deal. I recently received a lowball offer from an agent who was aggressive and difficult to work with from the outset. She refused to take any of my recommendations to get her offer considered, pried for private information, and even insulted my seller. Needless to say, that approach didn’t end well.

If you’re a realtor submitting an offer, keep in mind:
✔️ A friendly and professional approach is best; you have an obligation to your buyer!

✔️ In this market, remember that we need to lean on each other to navigate the challenges as a team.

I’m Here to Help

Navigating today’s real estate market takes experience, strong industry connections, and a collaborative approach. Whether you need guidance on pre-listing inspections, insurance solutions, or strategy to keep a deal on track, I’m happy to share my resources and contacts.

Thinking about selling? Let’s make sure you’re prepared for today’s realities so you can get your home sold with fewer headaches.