What To Do If Your Buyer Pulls Out Of Your House Sale
Selling your property can be a complicated process, made even more difficult if a buyer pulls out before exchange.
To help you tackle this, we’ve outlined everything you should know about why your buyer might withdraw, the steps you can take if they do, how you can speed up the sale process, and the cost factors to be aware of.
In this article:
- What is a property chain?
- Why might a buyer pull out of a house sale?
- What are the next steps when a buyer pulls out before exchange?
- Can a buyer pull out after exchange of contracts?
- Are sellers liable for legal fees if a buyer pulls out?
What is a property chain?
Often, when selling your house, you are a link in a property chain. A complete sequence is when you are selling your house with a view to buying a new one, and a buyer is selling their home with a view to buying your current house.
However, when a buyer pulls out before exchange, and your move is dependent upon selling your home, the chain can fall apart. Usually, the shorter the chain, the safer your position is, so you should take steps to avoid a situation that may result in an individual pulling out of buying a house.
Why might a buyer pull out of a house sale?
Buying and selling property is dependent on many factors, so it’s important to be aware of why your buyer might end up withdrawing from negotiations. We’ve highlighted a handful of the most common reasons a buyer pulls out of a house sale.
Most common reasons for a buyer pulling out of a house sale
This is where a property chain can prove problematic. If your buyer encounters issues in selling their current home, they might start to struggle to honour their handshake agreement to buy yours. To avoid this, try to find a chain-free buyer, such as somebody buying for the first time.
- The buyer finds a new property
Your buyer may continue to lookout for other properties outside of your negotiations. If this is the case, a buyer may pull out of your sale in favour of a property elsewhere that better suits their budget and requirements.
- The buyer’s financial position changes
Finances can change at the drop of a hat, for some, and your buyer may find themselves in a more difficult position than previously pictured. In instances as such, don’t be surprised when your buyer pulls out before exchange.
- Issues raised in the property survey
Sometimes, buyers try to negotiate the asking price down because of issues raised at the surveying stage. Ultimately, it’s up to you, as the seller, if you are willing to drop the price, but a buyer may pull out if not.
What can you do to protect yourself from someone pulling out of buying a house?
While many elements are out of your hands, there are some steps you can take to protect yourself from coming up against a buyer pulling out of a house sale.
- Take time to evaluate your buyer
Importantly, take the time to dig a little deeper into the background of each prospective buyer. This will help to confirm whether they’re actually in as strong a position as they claim to be.
- Request a token deposit from your buyer
Requesting a token deposit from your buyer, payable to your solicitor, puts you in a stronger position should negotiations stop. In short, the deposit will cover some, if not all, of your fees if the deal collapses and isn’t your fault.
The buyer can reclaim their deposit upon exchange of contracts and completion, but this isn’t a required payment on their part by any means and is a gesture of good will.
- Reduce the asking price
If issues raised at the survey stage are the leading reason for withdrawal, a buyer may be tempted to continue to completion if you agree to a reduced asking price. This isn’t ideal, but likely won’t be nearly as hard-hitting as a complete collapse in negotiations.
What are your next steps when a buyer pulls out before exchange?
Putting your house back on the market
If your immediate future isn’t reliant on a quick house sale, you can always repeat the steps you’ve taken before and put your house back on the market. This can feel frustrating, and will come with estate agent costs, as you well know if you’ve taken this route once before already.
Your previous buyer may have previously raised some superficial concerns about the property, so now would be a good opportunity to attend to small fixes and renovations.
Receive a cash offer for your home from a property purchasing company
If you’re hoping for a quick sale, your best course of action could be to get in touch with a regulated property buying company, such as Good Move. You’ll receive a cash offer within 24 hours of up to 85% of your property’s value and can enjoy a sale within two weeks.
Can a buyer pull out after exchange of contracts?
A buyer cannot legally withdraw an offer on a house if contracts have been exchanged. This makes exchanging contracts the most important element for you, as the seller. If a buyer does pull out after exchanging contracts, you are within your rights to sue them for losses.
To help speed up the process of exchanging contracts, you should make it your priority to keep on top of all matters on your end.
The longer the delay, the more chance you have of a deal falling through. This means immediately addressing any legal costs, as well as any alterations that might be required after surveying. Similarly, you should ensure you have all appropriate documents signed and ready as soon as they land on your desk; make sure to check with your solicitor if there’s anything missing.
Finally, try to nail down a date for completion early. This is the date that your buyer can legally move in. The completion date can be arranged for as long or short after exchanging contracts is convenient for you and your buyer, but make sure to let your solicitor and estate agent know of any days you can’t do well ahead of time to avoid stalling.
Are sellers liable for legal fees etc if a buyer pulls out?
Unfortunately, if a buyer pulls out before exchange, you, as the seller, are liable for any fees paid up until that point. Depending on where you are in the process, you can end up facing fees of up to £5,000-6,000. This can include mortgage arrangement costs, survey payments, up front removal charges, and, generally most impactful, solicitor fees.
Solicitor fees when buyer pulls out
The costs owed to your solicitor, also known as conveyancing fees, will be dependent upon how many hours they’ve put in, so make sure they’re only working when necessary, especially if you have concerns over your buyer.
By limiting your solicitor’s billable hours, you can save plenty, but you should still be prepared for legal fees in the ballpark of £500-1,500.
Selling your home can be stressful, and a buyer pulling out of a house sale can make your position even more difficult – especially if you’ve already exchanged contracts on a new property.