You saw the home of your dreams online or in the estate agent's window and fell in love. Then suddenly, just before you were about to exchange contracts… you're told the seller wants to pull out of the deal.
No matter if you're buying or selling, it's disheartening when a property sale falls through, especially if you're part of a property chain. However, it happens more than you think, with one in three sales not coming to pass.
If your property sale has fallen through, you may be wondering what the next step is and if you're entitled to compensation. We've put together this article to show you what to do in this frustrating situation.
At what point can you pull out of a property sale?
Buyers and sellers can pull out of the sale of a home before contracts are exchanged, which could be 4 months from when your offer was accepted. Before then, the sale is 'subject to contract', even if both parties have agreed.
If contracts have been exchanged, legal action can be taken to recover costs.
Why do property sales fall through?
Pulling out of a sale can happen for several reasons. Buyers may pull out because a home survey has uncovered a serious problem, or they can't get a mortgage for the property.
Sellers may pull out because they received a higher offer from another person – this is known as gazumping.
If a sale falls through in a property chain, this can have a knock-on effect, with other buyers and sellers having to pull out through no fault of their own.
Sometimes people just change their minds and decide they want to stay where they are.
What costs need to be paid if a property sale falls through?
If a sale falls through, regardless of whether the buyer or the seller pulled out, you still need to pay any solicitor's fees for conveyancing work that has taken place. The amount you pay will depend on how far through the process you got. However, some solicitors will work off a ‘no completion, no fee’ basis so its worth establishing this from the start.
If you've undertaken a home survey, you still need to pay the surveyor, even if you're not buying the property. Fall through transactions cost consumers over £880m every year in wasted fees so its worth making sure you have the best chance of completing your purchase or sale from the start of the process.
What to do if a property sale falls through
The first thing to do is remain calm and remember not to panic. While someone pulling out of a sale is not a great situation, it's vital for emotion to not cloud your judgement. You don't want to accept a low offer because you want to sell, or exchange contracts on a home that was your second or third choice.
If you're part of a property chain, you must let the people buying or selling your home know. You can then discuss the next steps and see if they're still interested in moving forward. If someone has already agreed to buy your home, you'll have to decide whether you want to continue with the sale.
If you're selling and the buyer has withdrawn because of the results of a home survey, you'll need to take this into consideration. You might need to fix the issue or lower your price accordingly when your property goes back on the market.
Looking to the future: reservation agreements
The UK Government is looking into how buyers and sellers can be protected financially when a sale falls through. One of the options currently being investigated is reservation agreements.
With a reservation agreement, buyers and sellers agree to pay a deposit when an offer is accepted. If one party pulls out of the deal without reason, the other receives the deposit.
While the reservation agreement has been discussed in Parliament and trialled in some parts of the country, it is currently not part of UK law.
However, there's nothing to stop you from doing this voluntarily if you want to.
How BreezeMove can improve the odds of a property transaction being accepted
Whether you're buying or selling your home, BreezeMove can increase the chances of moving successfully. While one in three sales typically fall through, with BreezeMove, it's only one in ten.
With our unique online system, you can see how your transaction is progressing and receive automated updates. No need to spend time on the phone chasing up estate agents and solicitors!
Not only is your house sale more likely to go through, but on average, it takes 50% less time to get moved in. Just sit back, relax, and imagine yourself in the home you've always wanted.
Contact us today for your free demo and see how BreezeMove can streamline the buying and selling process.
