Understanding what to do when a buyer pulls out
In this article we touch on why a buyer might of pulled out, what you can do and if you have any alternative options to rescue your onward purchase.
If you have agreed on a sale on your property there is a good chance that you’re part of a property chain, given that you haven’t sold to a first-time buyer or an investor. A property chain is when the buyer of your home is dependant on the sale of their own property to complete on yours.
There called property chains because they can have several links and a number of different buyers and sellers that are depending on each other to move. If anyone of the links in the chain can’t continue with the purchase, this might result in the whole process breaking down and your house buyer pulling out.
In this article, we take an in-depth look at property chain breaks and what options you might have. You can use the table of contents below to navigate to a particular section:
If you’re selling your house and your buyer pulls out last minute you might be left perplexed, wondering why they’ve done it and if it’s legal. The simple answer to this, is mostly, yes the buyer can pull out of buying your property anytime up until the exchange of contracts.
The reason for this is before exchanging contracts a property purchase is not legally binding for either party if you have exchanged contracts however then it’s different because it will be subject to the terms of the contract.
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When you accept an offer from a buyer on your property, as we mentioned above, that doesn’t quite mean everything done and dusted. In a typical sale, there are a fair few months, although it varies considerably, between that first offer being accepted and the completion of the property, and during that time there are several reasons that a buyer might pull out and it can be at any given time.
That being said, there is a time in which it’s most common for the buyer to pull out of the purchase, right after the RICs survey. This is an extensive survey that is done on your property by a third party, and it will highlight any issues or potential concerns. If something is flagged up in the survey it might scare the buyer or they might look to drop their offer in order to compensate for the issue, and this the most common reason the sale process breaks down.
Another common time for a buyer to pull out is when it comes to the mortgage approval stage. There’s no set time of when this might be, but it’s typically a fair few weeks down the line, and it happens if a buyer's finances aren’t in order and their application for a mortgage on your property gets rejected.
House sales are complex and generally take a while, so there’s a lot of things that can crop up during the process meaning there are several reasons that a buyer might pull out of a sale. If you understand the reasons for your buyer pulling out, sometimes there might be something that you can do to mitigate their concern and prevent it from happening.
We’ve compiled some of the main reasons that a buyer might pull out of buying your property below:
We touched on this in the previous section, as it’s the most likely reason for a property sale to break down. If something crops up in the survey of your property then the buyer might be worried about purchasing it, or look to negotiate the purchasing price to account for the highlighted issue. At this point, if no agreement can be made, then that’s often the end of the line.
Changing their mind
Simply sometimes buyers change their mind and it’s perhaps the most frustrating reason. A buyer could get cold feet about buying a property for a whole host of different reasons and a lot of which can be completely outside your control. It’s worth asking the estate agent to find out exactly why they have changed their mind, to see if you can alleviate their worries or change their mind to rescue the sale.
Finding another property
Partially falling under changing their mind, but another reason a buyer might pull out is that they find a property that they prefer or have managed to get an offered accepted at a lower price. Again, it might be worth understanding if there is anything you can do about this, such as reducing the offer you will accept in line with the property that they’re now looking to purchase.
A common reason that someone pulls out of a house sale is that their finances aren’t in order and they get rejected by the mortgage company for the loan. This could be because their credit status means they’ve been rejected, or the mortgage company don’t think your house is worth what they are paying for it.
This is when the buyer suddenly reduces their offer right before the exchange of contracts, trying to put you under pressure to accept it in order to ensure you are able to purchase the property you are moving onto. This is cheeky and annoying, but completely legal and at this point, if they hold strong to their new offer you might find the property sale breaking down.
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Although frustrating, sometimes with a bit of foresight if you believe your buyer might pull out you can often prepare yourself, so you should always keep an eye out for the telltale signs of a flaky buyer.
Several re-negotiation discussions
It should set off a few alarm bells if the buyer is constantly looking to re-negotiate their initial offer. It’s not irregular for buyers to want to re-negotiate after a survey, but if it’s continually happening it probably means that they aren’t prepared to pay anywhere near the initial price, or don’t feel that they have or can get the funds too. This could be an early telltale sign that they are either looking for a significant reduction or are going to pull out of the purchase completely.
Slow to the milestones
There are several processes to go through when buying a property, such as confirming ID with estate agents, appointing solicitors, getting a survey and having a mortgage in place to actually buy the property. If a buyer is slow at meeting these milestones, repeatedly, then it might be an indication that they aren’t fully committed or they could miss deadlines and really draw out the whole process.
Hard to get a hold of
Communication is key throughout the process of a house changing ownership, another sign of cold feet can be when a buyer is hard to get a hold of. There should always be a consistent line of communication between vendors and buyers to make the whole process as smooth as possible.
You’ve just been informed that your buyer is pulling out, so what are your options and how can you stop them from doing so? Sometimes it’s just inevitable, and it’s completely out of your hands, but that doesn’t mean you don’t have options, especially if you’re still wanting to complete an onward purchase.
Can you stop them & is it worth it?
The first question to ask, can you stop? Followed shortly after by, is it actually worth stopping? There may be times where you can prevent a buyer from pulling out by communicating with them about the reasons. Nine times out of ten, when something can actually be done, it’ll be the buyer wanting to renegotiate the purchase price of your property.
Hear the buyer out, it might be worth taking a small drop in your property price if you can afford to, as you might have paid for solicitor costs and more on an onward purchase and you don’t want to lose that progress. At times though, and it can be hard to accept, it simply isn’t worth trying to bend over backwards for the buyer.
So if it isn’t going to quite work out, what else can you do? Not to worry, you might still have a few options to act quick enough and rescue your onward purchase.
All is not lost. As long as your onward purchase is willing to wait you might still have options to get your sale back on track and rescue that dream house you were so looking forward too.
Go back to market
The obvious first option is to go back to where you originally sold the property, likely the open market. You can ask your estate agent to list the property again on the popular portals like Rightmove & Zoopla, as well as starting to drum up interest from their own database. If you’re looking to sell quickly, we would also suggest pricing the house reasonably, look at the comparable properties and try and undercut them, as you’re going to need the house to go quickly in order to keep your onward move.
Contact previously interested parties
If you were lucky enough on your first agreed sale to have a bit of a bidding war, it might be worth seeing if your local estate agents can go back to any of the interested parties and see if they would still consider the property that they may have narrowly missed out on.
Contact a cash property buyer
A third option is to come to a cash house buying companies like ourselves. It won’t work for everyone as unfortunately, we can’t provide you with market value, but if you are able to take a reduced offer on your property then we might offer the perfect solution. We can buy your house in as little as 7 days, with no chain, which should be more than quick enough to keep you on track with your onward purchase.
Have you been let down by your buyer? We can help
You’ve just had it happen to you, so you know exactly how heartbreaking it can be to lose your buyer and unfortunately most of the time if your buyer pulls out, it’ll mean that you’ll have to cancel your onward purchase.
It isn’t always the case though, if your onward purchase is willing to work with you and can wait a little longer you might still have some options, such as what we mentioned before like going to The Property Buying Company or trying your chances on the open market, perhaps at a reduced value to get a quick sale.
Unfortunately, depending on what stage your buyer has pulled out it’s highly likely that you may incur some costs that you won’t be able to recover. If your buyer has pulled out you might lose your fees on the selling conveyancing side which could be a few hundred pounds.
However, the cost is far more if your buyer pulling out is forcing you to pull out of purchasing another home. The cost of this can range into the thousands when you include that you might lose your legal and conveyancing costs, the cost of the searches on an onward purchase if you can’t find another buyer and any surveys that you may have done.
We can help negate this slightly, as one of the benefits of choosing to go with us to The Property Buying Company is that we cover all your fees – which includes your solicitors. This should hopefully go a little bit of the way to repairing the financial damage caused by your buyer pulling out.
If you’ve been let down and your buyer has pulled out, but you can’t let your dream home go that easily, then we can help. The Property Buying Company are able to buy your home in as little as 7 days, we take all the stress and hassle out of a typical sale, as well as covering all your fees. The whole process is simple, and importantly, we’re not part of a chain being genuine cash buyers.
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