Why Off-Market Deals Die After LOI (and how to reduce it)

Most searchers don’t lose deals at sourcing. They lose them after LOI. The frustrating part is that it rarely happens because the business is “bad”. It happens because the deal was never truly aligned. Here are the most common reasons off-market deals collapse post LOI: • The seller was never fully committed They liked the idea of a sale. They did not emotionally accept the reality of it. So the moment diligence feels invasive, they go quiet. • There is a trust gap Off-market deals are relationship driven. If trust is not built early, every diligence question feels like an accusation. • The transition was never clarified Many owners say, “I’ll help for a bit.” But “a bit” means different things to different people. When you define it late, it becomes friction. • The number was based on hope, not logic On-market deals get priced by brokers and comps. Off-market often starts with a number the seller wants. If you do not reset expectations early, LOI becomes a collision point. • The buyer stopped sourcing This one is underrated. Once you sign LOI, you feel like you’re done. Then the deal breaks and you’re back to zero. A simple way to reduce fall-throughs is to run a quick alignment check before you go deep. Here are a few questions that you can ask: • Why are you selling now? Why not 12 months later? • What does a good outcome look like for you beyond price? • What are you worried I might change in the business? • What does your ideal transition look like in weeks and hours, not vague words? • Who else needs to be comfortable with this decision? spouse, kids, partners • If diligence surfaces issues, how do you want to handle it? If these questions feel uncomfortable, that’s the point. Better to surface the truth early than discover it after 8 weeks of work. Curious to know from the other: Where do your deals usually fall apart? Pre LOI, post LOI, or financing?