What to do When a Buyer Pulls Out of a House Sale?
Estimated reading time 5 minutes
When selling your home, it is highly likely that the buyer of your home is also selling their property too – unless of course they are a first-time buyer. This is known as a property chain, and if one link in the chain fails, the whole chain can fall apart – the last thing you need when you want to sell your home quickly. Reasons for this differ, from a buyer getting cold feet, to a mortgage offer falling through, but there is one definite answer: it will end up costing you in the process. So, what can you do when a buyer pulls out of a house sale? What are your rights?
TABLE OF CONTENTS:
- When does a buyer typically withdraw their offer?
- What to do when a buyer pulls out of a house sale?
- How much will I be out of pocket?
As standard, the selling process includes choosing an estate agent that works well for you, engaging a solicitor and putting your property on the market. Before long, a buyer may view your property and decide put an offer in on your home. After the initial offer is accepted by you (the seller), the buyer will instruct their solicitor to find any problems with the house, and the mortgage company will conduct a thorough valuation on the house, as well as a comprehensive survey on the property.
It is at this point, towards the very end of the process,
that it is most common for a buyer to withdraw their offer on your property.
There are a number of reasons why a buyer may decide to pull out before contracts are exchanged. According to a study by the HomeOwners Alliance, more than two thirds (69%) of the home sales that fell through did so because of two main buyer-related reasons.
These are:
- the buyer changing their mind / finding another
property (39%) - the buyer’s finances not being in order (28%)
It may also be due to any issues being highlighted in the
property’s survey, which may find that the roof needs replacing, or the porch
didn’t have planning permission. This allows the buyer to re-negotiate a price
based on the findings, resulting in a reduced offer. If the seller is not
willing to drop the price, this may result in the buyer withdrawing their offer
and moving on.
Sell House Fast’s top tip:
It is advisable to avoid paying out any fees until the buyer has a survey done and are still looking to proceed – at this point, the buyer has incurred fees of their own and put in an offer, so it is less likely for them to pull out. Speak to your solicitor and specifically ask them not to complete any work until you are sure you won’t be losing any money, as your solicitor will charge you for working with the buyer who has pulled out of the house sale.”
Once a price is agreed by both parties, it is a good idea to instruct your own solicitor to go ahead with the paperwork for the property you are hoping to buy, as well as telling your mortgage lender to proceed with the survey, to get the property chain moving again.
If a buyer decides to pull out of your house sale, it can be a major issue if you are about to “complete” on your new home, or you have already purchased it. Therefore, in order to keep the property chain moving and not jeopardise losing the property you wish to purchase, you have two main options:
- Find a first-time buyer to purchase your property
- Or a find a cash buyer
These options can significantly speed up the process of selling your home, which is vital if you are in a hurry.
Unfortunately, there is not much you can do when a buyer
pulls out of your home at the last minute. In England, buyers are well within
their right to withdraw an offer on a home before contracts are officially exchanged
between both parties. This is because, until contracts are exchanged, the buyer
isn’t legally obliged to purchase the home and does not have to pay for any costs
the seller may have incurred throughout the process.
However, if you live in Scotland, the process is entirely different, and tends to favour the seller more. Although it is possible to withdraw an offer at any point, until missives are concluded. If you wish to pull out of the house sale, it is advisable to get your solicitor to formally withdraw your offer in writing.
However, once missives have been agreed upon, the seller has
the right to take you to court as you are in breach of contract. This can cost
you an awful lot of money and you may also need to pay the seller’s expenses
too. If you are unable to pay the fees for any reason, the seller may ask you
to compensate the costs of finding another buyer instead.
In simple terms, sellers in England will be out of pocket, however in Scotland buyers who withdraw their offer will be liable to pay the seller fees.
Before you put in an offer on any property – anywhere – you must be 100% sure you are serious about purchasing the property and you know you can afford it.
Unfortunately incurring fees is not something you can avoid
when a buyer pulls out of a house sale. Research by the HomeOwners Alliance found
that just over half of sellers (51%) incurred financial costs averaging around
£2,727, and 12% were forced to shell out more than £5,000.
These costs include:
- Legal/conveyancing fees (23%)
- Legal searches (13%)
- Surveys on purchase properties (15%)
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Feature image credit: Pedro Tavares / Shutterstock
