The Real Reason Deals Die After the LOI

I can usually tell when a deal involving a business sale or purchase is going to die—and it’s almost never at the closing table.

It happens earlier.
Quieter.
And often, not too long after the LOI gets signed.

What are the tells? The email cadence changes. Calls get shorter and questions start feeling… different.

On paper, everything is still “moving forward.” In reality, the deal has already started slipping.

And no—price typically isn't the biggest factor.

The LOI Is Where Reality Shows Up

People treat the LOI like a finish line. I’ve learned to treat it like a mirror.

Before the LOI, everyone is selling:

• The seller is selling the asset.

• The buyer is selling certainty.

• Advisors (Brokers, Attorneys, Accountants, etc.) are selling confidence.

After the LOI, nobody is selling anymore. They’re revealing and This is when the deal gets tested—not financially, but relationally.

Where It Starts to Go Sideways

Most deals don’t blow up in one dramatic moment. They erode.

It usually starts with something small:

• A diligence request that feels heavier than expected

• A timeline that quietly slips a week… then two

• A comment like, “That wasn’t how I understood the agreement”

That’s the crack and not because anyone is wrong—but because they weren’t as aligned as they thought.

The Quiet Gap Between Agreement and Alignment

When both parties sign the LOI (the same LOI mind you), they are often not signing the same expectations.

One side thinks:

“This is a framework. We’ll work through the details.”

The other thinks:

“We’ve basically agreed. Don’t rock the boat.”

That gap doesn’t show up on page one of the LOI. Instead, it shows up in the due diligence phase, when questions feel personal and clarifications feel like re-trades.

That’s where defensiveness creeps in and momentum subsequently slows. It's important to remember that most people don't buy or sell businesses regularly. So the gap in expectations isn't personal or malicious. It comes from a lack of experience. Similarly, each business sale is unique. So even an experienced businessman can fall into these same traps.

When Emotion Finally Enters the Room

Sellers often don’t feel the weight of a sale until after the LOI.

That’s when it becomes real as they start to consider:

• The building they renovated themselves

• The business they ran through downturns

• The employees who still call them for advice

At the same time, buyers are feeling exposed:

• Capital is tied up

• Advisors are poking holes

• The risk feels heavier now that it’s theirs

Both sides are vulnerable. Vulnerability often shows up as friction and (i hate to break it to you but) no spreadsheet prepares you for that moment.

Diligence Isn’t the Problem—Silence Is

I’ve never seen a deal die because someone asked too many questions. I have however, seen plenty die because no one explained why those questions mattered.

Without context:

• Normal diligence feels like distrust

• Legitimate issues feel like leverage plays

• Silence feels like strategy

If no one is framing the process, each side starts filling in the gaps themselves—and they usually fill them with the wrong assumptions.

When Advisors Stop Quarterbacking

This is the part people don’t like to talk about. After the LOI is signed, a lot of deals lose leadership.

• Brokers step back instead of stepping in

• Attorneys optimize for “winning” clauses

• Accountants chase perfect clarity in an imperfect world

The deal doesn’t need more voices. Instead it needs one steady hand keeping it moving forward.

Momentum is fragile after the LOI. If no one owns it, it dies.

Sometimes the Deal Didn’t Change—The Reason Did

This one is uncomfortable, but real.

The buyer’s situation shifts.
The seller’s confidence shifts.
The market whispers something new.

Suddenly the deal doesn’t feel as necessary as it did a month ago. Instead of addressing that directly, people drift.
And drifting is easier than saying:

“This no longer solves the same problem for me.”

So the deal fades quietly.

What I’ve Learned Over the Years

Deals don’t die after the LOI because of:

• Price

• Repairs

• One bad document

They die because no one bridged the space between agreement and alignment.

The deals that close are the ones where:

• Expectations are talked through, not assumed

• Diligence is explained, not dumped

• Emotions are acknowledged, not ignored

• Someone actively keeps the deal alive

An LOI doesn't mean the hard part is over, It means the real work just started. If your deals keep dying after the LOI, don’t look at the number on page one.

Look at what happens in the quiet space after the signatures— that’s where deals are either guided… or lost.

I spend a lot of time helping deals get from LOI to closing—especially when communication starts to break down. If you’re navigating that stage right now, I’m happy to talk it through.