You’ve accepted an offer on your home. Inspections are done, the closing date is getting close and you’re preparing for your next move. Then you get the call nobody wants: the buyer is having trouble getting their mortgage approved. Now what?
If your buyer’s financing fell through in Ohio, your options generally include extending the contract, negotiating a release or returning the home to the market. The right choice depends on the purchase agreement, the specific financing problem and whether the buyer can realistically fix it. After more than 20 years in real estate, I’ve learned that a financing problem doesn’t always mean the deal is over. Sometimes it’s temporary. Other times, moving on to another buyer is the better decision. Either way, you want the facts before you decide.
Why Does a Buyer’s Financing Fall Through?
Getting a mortgage is more involved than getting a preapproval letter. Even buyers who look well qualified can run into trouble during underwriting. The most common reasons:
- Changes in employment or income. A job change, a cut in income or trouble verifying employment can stop a loan.
- Credit changes. Opening new accounts, financing a car or taking on other debt before closing can change the numbers.
- Funds to close. Buyers sometimes struggle to document their down payment, closing costs or required reserves.
- Appraisal. If the home appraises below the price, the lender may not approve the loan as structured.
- Underwriting conditions. Additional documents, debt-to-income calculations or property issues can delay or prevent final approval.
Not every problem is a denial. A buyer who owes the underwriter one more document is in a very different position from a buyer whose lender has decided they no longer qualify. That’s why my first question is always the same: what exactly is keeping the loan from being approved?
What the Columbus REALTORS® Purchase Contract Says About Financing
Most homes in the Columbus area sell on the standard purchase contract published by Columbus REALTORS® and the Columbus Bar Association. The current version is dated June 2026. Contracts can be modified, and your signed agreement is what counts, but the standard form sets the framework most sellers will be working with. Three provisions matter most when financing gets shaky.
The loan application deadline (Section 3.2(b)(i)). The buyer must make a formal loan application, identify the lender in writing to the seller or seller’s broker and tell the lender they intend to proceed. If no other number is filled in, the deadline is seven calendar days after acceptance. Many contracts enter a shorter period, so check the number in yours.
Lender denial notice (Section 3.2(b)(iii)). If the lender notifies the buyer in writing that it can’t provide financing on the terms of the loan application, the buyer may terminate the contract by delivering a copy of that lender notice to the seller or seller’s broker within three calendar days of receiving it. If the buyer doesn’t deliver it in time, the buyer waives the right to terminate based on failing to get financing. Those are calendar days, not business days, and that deadline matters a great deal when earnest money is on the line.
Loan commitment period (Section 3.2(c)). This one only applies if the parties fill it in. When they do, the buyer is expected to obtain and deliver a written loan commitment within the agreed time. If that doesn’t happen, the contract gives the seller a path to terminate, but it requires specific written notice. It isn’t as simple as declaring the deal canceled the day a deadline passes.
My advice is to understand these terms before you accept an offer, not after a problem shows up. Questions about whether either side has the right to terminate, or whether someone breached the contract, belong with an Ohio real estate attorney.
What to Do First When Financing Fell Through
Before agreeing to an extension or putting the home back on the market, I want answers to four questions.
- Is the buyer denied or just delayed? Some conditions clear in a few days. Others make the deal impossible.
- What does the lender say? I want an explanation from the lender through the buyer’s agent, with the buyer’s authorization when needed. “The loan is having problems” isn’t enough to make a decision on.
- Which deadlines are running? The loan application, denial notice, loan commitment and closing dates all affect what each side can do.
- Is there a realistic fix? If the lender believes the buyer can close with a few more days, an extension may make sense. If not, waiting rarely helps the seller.
Just as important is what not to do. Don’t contact the buyer directly, and don’t accept another offer or sign anything until your agent confirms where the contract stands. A quick reaction in the first 24 hours can create problems that take weeks to unwind.
Should You Agree to Extend the Closing Date?
Sometimes an extension is the best option. Say the buyer has conditional approval, the appraisal is done and the lender just needs time to clear one final underwriting condition. If everything else looks solid, a few extra days may be far better than starting the sale over.
But an extension shouldn’t be automatic. I want to know exactly what’s outstanding, how long the lender expects it to take and how confident everyone is that it gets resolved. I also weigh your situation. If you’ve already moved out or you’re buying another home, a delay can add cost and complications on your side. Any extension should be a written amendment that states the new deadlines and any other terms that change. More time only helps when there’s a reasonable expectation the problem can be solved.
Can You Keep the Earnest Money?
This is usually one of the first questions sellers ask. Earnest money is the deposit a buyer makes with the purchase agreement to show they’re committed, and it’s normally credited toward the purchase at closing. A buyer’s financing falling through doesn’t automatically mean you keep it. A buyer who properly uses the financing contingency, including delivering the lender’s denial notice on time, may be entitled to get it back. Missed deadlines or a disputed default can change that.
What happens when the buyer and seller disagree?
Ohio Revised Code 4735.24, updated effective March 2, 2026, governs earnest money held in a broker’s trust account and sets a procedure for disputes. When the purchase agreement includes the statute’s provision, the broker generally must return disputed earnest money to the buyer no later than September 1 following the two-year anniversary of the deposit, unless the broker has received jointly signed written instructions or notice of a filed court action within that period.
In practical terms, a seller who believes they’re entitled to a disputed deposit generally needs the buyer’s signature on a release or a court filing. The statute doesn’t decide who breached the contract. It controls how the broker handles the money. I encourage sellers to weigh the amount at stake against the time and cost of a dispute, and to involve an Ohio real estate attorney once the parties disagree.
Putting Your Home Back on the Market
You can relist once the existing contract has been properly terminated. Having a buyer whose financing is in trouble is not the same as having a terminated contract, so don’t assume you can accept another offer until that’s resolved. Once it is, I focus on three things.
Update the listing status promptly. As soon as the termination is documented, the MLS listing should show the home as available so it gets back in front of buyers quickly.
Explain why it’s back. Sellers worry that buyers will assume something is wrong with the house. Where it’s accurate, the listing remarks can say the previous buyer couldn’t obtain financing or that the sale ended for reasons unrelated to the property. The explanation has to be true, so I won’t claim there were no property issues unless that’s established.
Follow up with earlier interest. Agents whose buyers toured the home the first time should hear that it’s available again. It’s also a good moment to revisit the marketing, the current competition and the feedback from the first round. Coming back on the market doesn’t automatically call for a price cut. That decision depends on where the home stands in today’s market.
How to Reduce Financing Risk Before You Accept an Offer
The best time to manage financing risk is before you sign. When I review offers with a seller, I look at much more than the price.
Preapproval versus prequalification. A prequalification often relies on what the buyer reports. A stronger preapproval involves a review of credit, income and assets, and some lenders offer a fuller underwriting review before the buyer is under contract. No preapproval is a guarantee, but knowing how thoroughly the buyer has been vetted matters.
Talk to the buyer’s lender. With the appropriate authorization, I like to speak with the lender before recommending an offer. I’m not looking for the buyer’s private financial details. I want to know how far along the file is, what’s been reviewed and whether the closing date is realistic.
Weigh the whole offer. An offer that’s $5,000 higher with uncertain financing can be weaker than a slightly lower one backed by a well-documented loan file. That doesn’t mean always taking the lower number. It means weighing price, financing, contingencies, closing date and the likelihood of actually closing.
Stay in touch after acceptance. I track whether the buyer has applied, whether the appraisal is scheduled and how close the loan is to final approval. Regular check-ins catch problems before they turn into last-minute surprises. You can’t remove every financing risk, but you can avoid being caught off guard.
Frequently Asked Questions
Can a buyer back out of a home purchase if their loan is denied?
Often, yes. Under the standard Columbus REALTORS® contract, a buyer who receives a written lender denial may terminate by delivering a copy to the seller or seller’s broker within three calendar days. Missing that window waives the financing-based termination right. Your signed contract controls.
Does the seller have to give the buyer more time to get financing?
Not necessarily. Extra time is usually something the parties negotiate. If you agree to it, put it in a written amendment with the new deadlines.
Can a seller refuse to return the earnest money?
A seller can dispute the buyer’s claim, but that doesn’t mean the seller receives the deposit. Under Ohio law, a disputed deposit held by a broker generally goes back to the buyer after the statutory period unless both parties sign written instructions or a court action is filed. Talk to an attorney about a contested claim.
Does a failed financing contract hurt my home’s value?
Not necessarily. A buyer’s financing problem doesn’t mean anything is wrong with the house or its price. Before relisting, reassess the market, your competition and buyer feedback.
Can I accept another offer while the first buyer is having financing problems?
Not until the first contract’s status is confirmed. Financing trouble doesn’t end the existing agreement on its own. Ask your agent about termination and backup offers before you act.
The Bottom Line
Finding out your buyer’s financing fell through is frustrating, especially when you’ve already made plans around the closing date. But one failed contract doesn’t mean your home won’t sell. Sometimes the right move is giving a qualified buyer a little more time. Other times it’s negotiating a release and finding a buyer in a stronger position to close. My approach is to get the facts, lay out the options and make the decision that best protects your goals. Getting an offer is only part of selling a home. Getting to the closing table is what matters.
Selling in Powell, Dublin or Central Ohio? We help sellers evaluate offers, understand transaction risk and get from listing to closing. Contact the Make It Home Group to talk through your plans.
This article is general real estate information based on transaction experience and publicly available resources. It is not legal, tax or financial advice. Contract terms and individual circumstances vary. Contract references are to the Columbus REALTORS® purchase contract dated June 2026. Consult an Ohio real estate attorney for legal questions and your lender or another qualified professional for financing matters.
