Homologous recombination (HR) is a template-based DNA double-strand break repair pathway that requires the selection of an appropriate DNA template for repair during the homology search stage of HR. Failure to execute the homology search quickly and efficiently can result in complex intermediates that generate genomic rearrangements, a hallmark of human cancers. Rad54 is an ATP dependent DNA motor protein that functions during the homology search by regulating the recombinase Rad51. How this regulation reduces genomic rearrangements is currently unknown. To better understand how Rad54 can prevent genomic rearrangements, we evaluated several amino acid mutations in Rad54 that were found in the COSMIC database. COSMIC is a collection of amino acid mutations identified in human cancers. These substitutions led to reduced Rad54 function and the discovery of a conserved motif in Rad54. Through genetic, biochemical, and single-molecule approaches, we show that disruption of this motif leads to failure in stabilizing early strand invasion intermediates, causing loss-of-heterozygosity rearrangements. Our study also suggests that the translocation rate of Rad54 is a determinant in balancing genetic exchange. This mechanism is likely fundamental to eukaryotic biology.