The Top 3 Reasons Why Deals Fall Through

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 747 words

When a business sale falls through, the cause usually sits in one of three places: the seller, the buyer, or a third party such as a landlord, lender, regulator or advisor. Sorting problems this way helps, because each group needs a different defense, and most problems in all three can be spotted well before they become fatal.

The good news is that deals which are prepared properly and managed closely mostly do close. What kills them is surprise.

1. Problems on the seller's side

Seller problems begin with motivation. An owner without a clear reason to sell, or with no picture of life after the sale, tends to lose patience when the process gets hard and to back away from reasonable compromises. Before going to market, be sure you want to sell, and why. Our guide on when is the right time to sell can help with that question.

Three other seller habits cause most of the remaining trouble.

• Price expectations. A price the financials cannot support scares off serious buyers and invites long, fruitless talks with unserious ones.
• Incomplete disclosure. Holding back a known problem, such as a large customer about to leave or a new competitor opening nearby, almost always comes out, and it destroys trust when it does.
• Inflexibility. Refusing any seller note, transition role or adjustment even when the buyer has a real concern.

2. Problems on the buyer's side

Some buyers are curious rather than committed. They enjoy looking at companies but lose interest once they see how much work running one involves. Others cannot secure financing, or discover late that they cannot fund the gap between the loan and the price. Some expect a bargain and will not pay fair market value however strong the company is.

The defense is screening before the buyer sees anything that identifies you. Ask what they have bought or run before, why they want this company and how they will pay. Require a financial profile that proves they can fund the purchase. A buyer who will not provide one is telling you something important, and it is better to hear it in the first week than the fourth month.

3. Third parties you do not control

Even with a willing seller and a capable buyer, someone outside the deal can stop it. Most of these risks can be found early. Read your lease and major contracts for assignment and change-of-control clauses before going to market, ask which licenses do not transfer automatically, and choose a transaction attorney who has closed deals and understands that the goal is a deal that protects you, not a deal that never happens. The usual sources of outside trouble are listed below.

• Landlords who will not assign the lease or grant a new one on workable terms.
• Lenders whose credit committees add late conditions or decline the loan.
• Government and licensing bodies, where permits, licenses or approvals do not pass to a new owner automatically.
• Key customers or suppliers whose contracts require consent to a change of ownership.
• Advisors on either side who treat every risk as a reason to add another protection, until the agreement can no longer be signed.

Finding problems while they can still be fixed

Very few problems in any of the three groups are unsolvable when they are found early. The danger is timing: a landlord issue discovered a week before closing, a buyer whose financing was never checked, a seller who realizes during due diligence that he is not ready to let go. Each of those could have been handled calmly months earlier.

Build the checks into the start of the process rather than the end, and keep more than one buyer interested for as long as possible, so a single failure does not end the sale. Our answer on what commonly causes a sale to fail in due diligence covers the investigation stage specifically.

How MDR & Associates guards against all three

We start with the seller: a discovery meeting to understand your reasons, an opinion of value based on three years of financials, and a candid conversation if expectations and the market are far apart. We decline engagements when we do not believe we can sell for maximum value. Buyers sign an NDA and complete a financial profile before learning who you are. And we raise leases, consents and licenses early in our ten-step process, not at the closing table. Our results page lists companies we have sold. To begin, contact us.

Where this fitsHow a business sale works, step by step →

Questions owners ask next

What should I do if my landlord will not approve the lease transfer?

Find out why first. Landlords often want assurance about the new tenant's finances or updated terms, which the buyer may be able to give through a guarantee or larger deposit. If the landlord still refuses, the options include the buyer negotiating a new lease directly or relocating the business. Raise the lease early, with your attorney, so there is time.

How can I tell whether a buyer is serious?

Serious buyers answer direct questions: what they have bought before, how they will finance the purchase, what their timeline is and who makes the decision. They sign an NDA and provide a financial profile without complaint. Vague answers about money, or a buyer who wants detailed information before identifying themselves, are warning signs.