House Sale Fallen Through Last Minute

Help, my buyer has pulled out of my house sale

Selling your home can be a frustrating process. There are so many unpredictable variables that either slow the whole process down or make you go back to square one of buying a property.

There's a lot of misinformation out there around statistics for the percentage of sales that fall through and return to market, with many websites quoting "1 in 3" properties will go SSTC.

But, data from Nethouseprices suggests it's actually less than this, with approximately 15% of properties marked SSTC (Sold Subject To Contract) returning to market.

Although considerably less than the majority of quoted figures online, it's still not comforting if it's happened (or is happening) to you.

In this article, we'll touch on what a chain break is, why it happens, if you can stop it, and the impact of a collapsed sale.

Table of Contents

• What is a chain break?

• Why do house sales fall through?

• How to stop buyers pulling out last minute

• The cost of a collapsed property sale

• Ways to repair a chain break

What is a chain break?

Chain break is a bit of an industry term, you may simply label it as a house sale falling through.

The reason it's called "Chain Break" is because it refers to a property chain, which is when a homebuyer and seller are linked due to their purchase or sale of a property. When the property chain falls through, it breaks, hence the name.

Chain breaks are usually perceived as a negative situation, and there are many benefits to not being involved in a chain break. For example, when you are not part of a chain, it can make house buying more predictable, as you are not subject to uncontrollable events.

Another example of a benefit is it puts you in an all-around strong position. Many sellers would prefer to be with a buyer who isn’t part of a chain, as this would potentially speed up the selling process.

Why do house sales fall through?

There are many different reasons why a chain may break, many of which are completely outside of your control.

As previously mentioned, all transactions are linked, which therefore means everything has to run smoothly for a property chain not to fall through. If a single buyer or seller within the chain has an issue, this can cause a series of sales to collapse if not repaired quickly enough.

Being part of a chain can not only slow the whole selling and buying process down, but also carries more risk as an overall transaction.

Understanding the situation is the first step to attempting to fix it, right? So, what exactly are the most common reasons for a chain to break? We've detailed them for you here, based on our experience having been in the property industry since 2012 and dealt with thousands of transactions:

1. A change of circumstances

It can be hard to pinpoint exactly why this is; it could be illness within the family, losing a job or even a relationship breakdown. There are a number of reasons, but unfortunately, up until the stage of exchange, there is no obligation to go through with the sale.

2. An adverse survey

An extremely common reason for a sale falling through is at the point of a survey.

If a RIC's survey is conducted on a property at the point of purchase, then it's very likely it will highlight some faults; it almost always does.

This is a crucial tipping point of any sale, as it is often the time of renegotiation. The buyer will often use aspects of the survey to lower the purchase price, and if both parties don't accept this lower figure, it can be troublesome to the continuation of the sale.

At this time, the seller is likely going to be weighing up their option,s whether they should take the offer or go back to market.

3. Mortgage issues

Although the buyer may have a Mortgage in Principle, it doesn't put them completely in the clear.

Statistics by the Online Mortgage Advisor state that "One in six (16%) mortgage holders have overcome being rejected for a mortgage in the past" with "Four in 10 (41%) 18 to 24-year-old homeowners have experienced a mortgage rejection".

A rejection on the mortgage can happen for a number of reasons, such as poor credit history, high debt levels, concerns on affordability and even potential issues with the property valuation.

The recommendation here would be for the buyer to find another mortgage provider as soon as possible. It's worth speaking to a Mortgage Advisor, explaining the reasons for the rejection and exploring whether there could be another, less strict, mortgage provider that will lend.

4. Legal issues

It's quite rare that a property falls through due to legal issues, because a lot of these can be overcome by indemnity policies and the like, but it does happen on occasion.

Most issues when it comes to legal process will revolve around the boundaries, shared access or shared drains. These might all be things the seller isn't completely clear on, and may result in issues that concern the buyer.

5. The process is taking too long

Selling a property in the traditional way takes a long, long time. We wrote an article that detailed the average time to sell, if you want to read more about it.

If the chain is long and multiple issues in the sale process are taking a long time, causing delays, then it can add to the frustration and stress. Sometimes, that can simply be too much for people and put them off selling altogether.

We spoke to our in-house solicitor, Kirsty Rowett, about her thoughts and experience of the main reasons that sales fell through and here's what she had to say:

"From my personal experience, the main cause of a sale falling through is survey issues. It can be extremely difficult to overcome a change in price, especially if the seller is depending upon the full proceeds of the sale to purchase an onward property.

A close second would be a mortgage, but if this is raised quickly enough, it can often be rectified. Some mortgage companies are more stringent with their lending criteria than others, but having a good and flexible mortgage advisor will often mean you can find a suitable company who will lend for that specific scenario."

How to stop buyers pulling out last minute

So, you are part of a chain but feel nervous that a party may duck out. How do you stop a buyer pulling out last minute?

Be proactive, not reactive

First of all, you need to make sure you keep the communication channels flowing. Allow whichever party you are dealing with (whether it’s a buyer or seller) to be able to contact you at all times. Opening up a line of communication will help you to build relationships and increase the chance of keeping the chain.

Understand the reasons

Try taking control, if a party wants to pull out of the chain, contact them. Negotiate and ask for their reasoning behind this and see whether they can be persuaded to change their minds. If your buyer or sellers haven’t pulled out just yet, see if you can speed up the process of exchanging contracts.

You may be able to throw in some incentives like covering survey costs for instance, that can potentially help keep the buyer enthused.

Maintain momentum, avoid unnecessary changes

Delays, as mentioned prior, can really frustrate people in the chain and may be one of the reasons a sale falls through. If possible, you should always try to avoid unnecessary delays.

The cost of a collapsed property sale

The main cost of a collapsed sale is your time. You can lose weeks, even months of time, thinking and preparing to move only to be let down.

Outside of that, there's the financial aspect. There are quite a few costs involved in the sale and purchase process of property, including:

• Survey fees

If you are buying a house off the back of your sale, you may incur survey fees. According to Compare My Move, the average cost of these surveys in the UK sits at £630.

• Solicitor’s fees

There are some solicitors that will offer no completion, no fees, which could be worth looking into. Using statistics provided by Homeward Legal, the average cost to buy and sell a house in the UK is a combined £2,557.

• Mortgage fees

Over the duration of the sale, you'll still be responsible for paying your mortgage fees. This is hard to quantify, as everyone's mortgage fees and interest rates are different, but it's an additional cost to consider.

• Search fees

Fees vary slightly depending on the property and local council, but you are typically looking at around £250, based on our experience.

• Lender’s valuation fee

Depending on the bank or building society that you use for your mortgage, you may be charged a valuation fee for the purchase of your onward property. These do vary significantly, but for instance, Halifax Bank charge £100.

Adding all these expenses together could lead to a rather large loss.

Taking the averages from above, you would be looking at a cost of a collapsed sale being:

£3,537

So, it is understandable that many selling or buying properties want to avoid being part of a chain.

Protecting yourself, is there anything you can do?

There are a couple of things you can do to protect yourself from a collapsed sale. Although you'll never get that time back, you may want to consider homebuyer protection insurance, which will cover a lot of the financial costs of a fall-through.

Here is an interesting and detailed exchange between users on Reddit about whether homebuyer protection insurance is worthwhile.

Ways to repair a chain break

There are ways to repair a chain. To start, keep the communication channels open to negotiate with the party that has pulled out. They may be up for negotiations to stop the chain from falling through. Another option is to sell or buy a house through an auction company. This will allow you to sell or buy your property quickly. However, if you are selling your property via auction, it is unpredictable the amount of money you will receive.

You may be fed up of people falling out of your chain and want to sell your property quickly. Here at The Property Buying Company, we are more than just a cash buyer. We have our own cash facilities to offer you the best possible trade prices in the industry. Why should you choose us?

• We can buy your property quickly for cash

• You don’t have to pay any solicitor's* fees or survey fees

• We will offer you great customer service and support throughout

• We can complete in a timescale to suit you