Don’t Panic - What To Do When Your House Sale Falls Through

When a house sale falls through, it can be stressful and expensive for everyone concerned - buyers, sellers, and solicitors alike - so don't panic! In the worst cases, it can be truly devastating, crushing the hopes you had for your future.  It happens in an estimated 1 in 4 cases in the UK, but very few people think about it when they're moving toward a property deal.

Understanding the risk factors and the best ways to bounce back is crucial, so it's well worth thinking about what you'll do if the sale fails - even if you're fairly confident that everything is going to plan.

When there is a possibility of house sales falling through, we'll discuss why this happens and what you can do to prevent it. We'll also explore the obligations that estate agents and solicitors have to you in such circumstances, and help you put together a plan to use if your house sale does eventually fall through.

The Main Reasons Why House Sales Fall Through And How To Prevent It

There are many different reasons why a house sale might fall through, and no two cases are exactly alike. However, there are many common features that increase the likelihood of disruption in the sale. Here are eight of the most common causes, along with effective advice to help you combat these risk factors.

Change Of Mind

A buyer and seller usually don't know each other, which means it can come as a shock when one party changes their mind. This can happen for any number of reasons, ranging from relationship breakdowns to changes in employment circumstances, or even just changes in aesthetic preferences.

How To Avoid: 

• Sellers should make (and keep) the property in the most appealing shape
• Stay in touch, checking in with the process on the other side
• Try to complete the sale as quickly as possible.

Finances Not In Order

The buyer might find themselves unable to get the mortgage they need, likely due to failing to meet the lending criteria. Again, sometimes a change in circumstances is the cause, limiting access to money.

This can happen at any stage of the process but typically comes as a late surprise.

How To Avoid: 

• Sellers should ask for evidence of the buyer’s financial circumstances before officially accepting an offer.
• Buyers should aim to secure an in-principle mortgage agreement, usually applicable for up to six months.

Property Chain Break

A property chain break is when several people are depending on more than one transaction going through (i.e., a chain of transactions), and someone else in the chain encounters problems. If this happens, then everyone can end up with lost money and ruined plans. 

How To Avoid: 

• Find a good estate agent that keeps you up to date, and chases them if they don’t
• Control your own link in the property chain, keeping finances in order
• Buyers should ask whether there is a long chain before committing to a property
• Those who don’t depend on a property chain should advertise this.

Gazumping

The term "gazumping" refers to cases where a seller agrees to sell to a buyer, and then accepts a better offer from another buyer. Due to the competitive nature of the property market, this is unfortunately quite common. 

How To Avoid: 

• Buyers should try to get the seller to take the property off the market as soon as a sale is agreed
• Buyers can ask a conveyancer to set up a formal agreement between both parties
• Demonstrate to the seller that you are trustworthy (and note if you’re chain-free)
• If you’re a buyer being gazumped, you can try to appeal to the seller’s better nature by offering reasons to go ahead.

Unable To Find A Buyer

One sense of a sale falling through is one in which you expect to find buyers but then fail to do so. This can relate to time of year, area, condition of the property, and a whole host of events beyond your control.
 
How To Avoid: 

• Renovate your property and fix anything that’s damaged
• Sell during the spring and autumn
• Consider using an express estate agency company to shift your property

Property Survey Issues

During the property survey, someone might spot a reason why a property is unviable or less appealing than it seemed. This can often lead to a chain break, sometimes because of significant structural issues and at other times because of numerous smaller cosmetic problems.

How To Avoid: 

• Sellers should (as above) get their property into its best shape
• Buyers should always arrange a home survey as early as possible, to prevent disappointment
• Sellers may have a survey done themselves, so there are no nasty surprises

Conveyancing Delays

The conveyancing process can grind to a halt, causing buyers to pull out of an agreed sale. This happens because the legalities of selling homes are extremely complex and lengthy. Everything from slow conveyancers in another part of the property chain to delayed documents can become too frustrating to handle.

How To Avoid: 

• Get a conveyancer involved as soon as possible - earlier than you think you need to
• Look for highly rated conveyancers who are known for efficiency.

Market Conditions

Finally, market conditions are constantly in flux. Natural disasters, major political changes, pandemics, and the after-effects of pandemics can all influence how likely you are to be able to sell your home, or to find one you can afford to buy. 

How To Avoid: 

• Sellers should be prepared to lower their asking price if in need of a quick sale
• Buyers should consider whether they can afford to pay more if needed
• Both sellers and buyers may put the sale off until better times
• Sellers can opt to use a cash buying property company to sell estate.

Do Estate Agents Have To Tell You Why A Sale Fell Through?

After changes to the rules governing estate agents in 2013, estate agents must provide "open, honest, clear and timely sharing of relevant information."

This includes information about whether a number of sales have fallen through, and why - the buyer should be alerted in such cases.

Do Solicitors Charge If A House Sale Falls Through?

Some solicitors do charge you directly when a sale falls through, while others work to a "No sale, no fee" agreement. However, even in the latter case, you may still have to pay for any costs made to third parties (e.g., hours logged by solicitors, any identity verifications, and possibly search fees).

It's important to make a full and explicit agreement with your solicitor upfront so that you know precisely what is likely to happen if the sale doesn't go through as planned. 

Depending on your circumstances, you may even pose the question, 'do i need a solicitor to sell my house?'

What Are The Costs Of A House Sale That Has Fallen Through And Failed?

According to HM Land Registry, the cost of the average property sale was just under £130,000 in 2018, and has only increased since. This cost largely reflects the money spent on legal fees and on sellers marketing their homes - to say nothing of the emotional and time cost to both buyer and seller.

What Can I Do If My House Sale Falls Through?

It is important to understand why house sales most commonly fall through and what you can expect if this happens, then making a decision on what should you do to attempt to pick up the pieces. We have three main suggestions.

Sell Your Property Through An Estate Agent

Sellers can choose the traditional route, employing an estate agent to market their home and handle most of the paperwork associated with the process. The downside is that it can be prohibitively expensive - especially if you've lost money because of a sale that fell through. You are also subject to associated fees, typically paying close to 1.5%-2.5% of the selling price to the estate agent. To decide whether this option is right for you, ask yourself what matters most. If you're keen to have a hands-off approach, having an estate agent may be worth it. But if you want to make a quick sale, perhaps not.

Want to move faster? Read on.

Sell Your Property Privately

Although it sounds demanding to sell your own home, this is an increasingly common approach. It requires you to be disciplined, self-directed and comfortable with taking responsibility. After all, you're effectively becoming your own property's estate agent.

You'll have to have your home accurately valued, marketed, and whipped into tip-top shape for potential buyers. Once you find a buyer, you can instruct a solicitor to take care of the legal aspects of the sale.

The upside of selling by yourself is that you stand to save huge amounts of money. However, this approach involves a large time commitment, and some find the responsibility daunting.

Sell Your Property To A Cash Property Buyer

Finally, you have the option to get a quick sale with a cash house buyer company to take your house off your hands within days.

This is the perfect solution when you need to relocate or when you've inherited a property you don't want, for example.

It takes a lot of time and energy away from the sale process and allows you to free up large amounts of cash that can then be spent on finding the new ideal home for you. You also don't need to pay for solicitors or estate agents.

For more information, email or contact us at Property Buyer to find out how we can help.