What happens if my end buyer backs out of a double close?

Without a B-C closing there is nothing to repay a same-day transactional loan, so the A-B purchase should not close on that funding until the exit is fixed. Call your funder and title company immediately.

Can I get an extension if my end buyer is delayed?

Ask the seller for a signed contract amendment, and ask your funder. Axelrad has delayed and extended options; call before closing day.

Will I lose my earnest money if my buyer backs out?

It depends on your A-B contract. Inside a contingency period with proper notice, the deposit is typically refundable; after a contingency expires, it can go hard. If Axelrad funded the deposit and you cancel inside your contingencies, the deposit comes back to Axelrad and nothing more is owed.

What if I decide to keep the property?

Then you need a hold loan, not same-day transactional funding. A bridge loan is one short-term hold option; check the bridge loan page for current terms.

End Buyer Backs Out? What Wholesalers Should Do Next

Q: Can I replace the end buyer on a double close?

Often, yes. A new buyer needs a new B-C contract and a new review of their funds; an old approval does not carry over automatically.

It happens to every wholesaler eventually: the end buyer (your C-buyer) goes quiet, their lender pulls out, or they just walk. What you do in the next few hours decides whether you lose the deal, your deposit, or neither.

What should you do in the first hour?

Call your transactional lender. The request they approved no longer describes the deal. At Axelrad, call us before closing day, not after.
Call your title company. Stop any part of the closing that depends on the B-C sale.
Pull your A-B contract. Find the closing date, every contingency deadline and the cancellation terms.
Find out why the buyer backed out. A lender delay is different from a buyer who is gone.
Check your earnest money position. Is your deposit still refundable, and until when?

Is the buyer delayed or gone?

Situation	What it usually means	Options to discuss
Buyer's lender needs a few more days	The B-C sale may still close	Delayed or extended transactional funding; ask the seller for more time
Buyer is gone, A-B not yet closed	No exit to underwrite	Replacement buyer, extension with seller, or cancel inside contingencies
Buyer is gone, A-B already closed	You own the property	Re-market, or move to a hold loan such as a bridge loan

Can you still close with a replacement buyer?

Possibly. A new end buyer means a new B-C contract and a new review of their funds. An old approval does not automatically cover a replacement. Send the new contract and the new buyer's proof of funds or lender details as soon as you have them. Axelrad underwrites the deal, not you, so a strong replacement buyer is what matters.

If you switch the exit to an assignment and your deposit was EMD funded, the funded EMD can stay on the deal, but the new parties must also sign for the EMD so it remains assignable.

Experienced wholesalers keep backup buyers warm for exactly this reason. If you had other offers, call them first.

Can you get more time?

Two places to ask:

The seller. Many sellers would rather extend a few days than restart. Get any extension signed as a contract amendment.
Your funder. If the B-C leg needs longer than a day, Axelrad has delayed and extended options. Terms depend on the deal; call us.

What happens to your earnest money?

It depends on your A-B contract. If you are still inside a contingency period and give proper notice, the deposit is typically refundable. After a contingency expires, it can go hard. If an EMD lender funded the deposit, tell them right away too. Axelrad funds fully refundable deposits only. If you cancel inside your contingencies, the refunded deposit comes back to Axelrad and nothing more is owed: the EMD fee was paid up front, and there is no failure or non-performance fee. The exposure is after a contingency expires. Read is earnest money refundable? for the details.

What if you want to keep the property?

If the numbers still work and you would rather buy and hold, flip or re-market later, you are now in hold-loan territory, not same-day transactional funding. Axelrad's bridge loans are short-term hold financing; see the bridge loan page for current terms. Raise this early, because a hold loan has its own review.

How do you prevent this next time?

Verify the end buyer's funds before you set the closing date, not after.
Ask financed buyers for their lender and every open condition.
Check whether the buyer's loan program restricts quick resales. FHA rules, for example, generally make a property ineligible when resold within 90 days of the seller's acquisition (24 CFR 203.37a).
Keep at least one backup buyer.
Build contingency deadlines into your A-B contract that leave room for a B-C problem.

Our post can you get transactional funding without an end buyer? covers what changes when there is no resale.

Contract rights and obligations depend on your agreements and state law. This is general information, not legal advice; talk to a real estate attorney about your specific deal.

Key takeaways

Call your funder and title company immediately; the approved deal has changed.
Separate a delayed buyer from a gone buyer; the options are different.
A replacement buyer means a new B-C contract and a new review.
Check your contingency deadlines before your deposit goes hard. With Axelrad EMD funding, a cancellation inside contingencies owes nothing more.
Want to keep the property? That is a hold loan, such as a bridge loan, not same-day funding.

Talk to Axelrad

Buyer problem on a deal right now? Send the updated deal through Axelrad's application, and see transactional funding for how the funding works.

What to Do If Your End Buyer Backs Out at the Last Minute