A smooth property sale is the ideal scenario for any homeowner.
When the sale moves along quickly, it reduces your stress and can avoid unwanted costs.
Unfortunately, house sales sometimes fall through. But exactly how often does this happen? Keep reading to find out.
How often do house sales fall through?
According to HomeSellingExpert.co.uk, 31% of all house sales fall through at least once before completion.
This is like the figure quoted by Quick Move Now, who found that 35% of property sales fall through.
Such a high number of house sales fall through because there are so many things that can go wrong.
Estate agents, conveyancers, buyers and sellers are all involved. Only one of these people needs to make a mistake or change their mind, and everything collapses.
The regularity of house sales collapsing is a major reason that people are searching for new ways to sell. But there are ways to increase your likelihood of a successful sale. See more on this below.
Do I lose money if a house sale falls through?
In most cases, you will lose money if a house sale falls through.
Although most estate agents do not charge you in this situation, conveyancers do. If they have already completed hours of work, they expect to be paid for it.
You may also lose money if the selling price that you agreed is greater than what you complete for.
If you have to cancel your removal company, they may charge a fee for this.
In a Which survey, 84% of survey respondents lost money when their sale fell through. The average amount they lost was £2,899, so it is expensive for the deal to collapse.
Some solicitors operate on a ‘no sale, no fee’ package, but this is rare.
Can I sue someone if the house sale falls through?
The short answer is: it depends on the circumstances.
If the buyer pulls out of the sale after contract exchange, you can sue them for any loss this causes you. You may be able to keep the deposit.
If a buyer pulls out without contracts being signed, you cannot sue them for this. They did not make a legal commitment to buy the house.
If your solicitor or estate agent’s malpractice caused the deal to fall, you may be able to act. Professionals have indemnity insurance for this reason.
But it can be difficult to win these cases unless you have proof, and the circumstances are exceptional. Speak to a solicitor for more guidance.
Will the property chain fall apart if a sale falls through?
It is possible for an entire property chain to fall apart if a sale falls through.
Often, each buyer is dependent on the sale of their house to have the funds to complete. Once one of these sales collapses, all the others can fall apart simultaneously.
In some cases, the chain can survive, even if one transaction falls through. It requires that seller to find another way to fund the house they buy.
What causes house sales to fall through?
House sales falling apart are so common because this can occur for many reasons.
Buyer changes mind
One of the most common reason a house sale collapses is because a buyer changes their mind. This could be for dozens of different reasons.
Maybe a new job opportunity has arisen, or an unexpected cost has arisen. Maybe a survey reveals a problem that they were unaware of.
Gazumping and gazundering are two other reasons for sales collapsing.
These can set the process back to square one and cause a delay of several months in some cases.
Buyer’s lender causes issues
Mortgage problems are a common explanation, such as the offer expiring because the sale has dragged on too long.
Or the bank may disagree about the true value of the house, and refuse to lend the agreed sum. This often means that the buyer can no longer afford it.
Conveyancing delays
Conveyancing delays can often cause a house sale to collapse. An inefficient conveyancer can be deal-breaking.
Other reasons
Meanwhile, issues surrounding probate, divorce, sitting tenants or leaseholds can slow down the transaction.
If a transaction falls apart elsewhere in the chain, it can result in a knock-on effect.
This means that each seller cannot complete their sale, and cannot buy their new property.
Can a chain-free house sale fall through?
Lots of people choose to sell their property to a cash-free buyer, as the deal is less likely to fall through.
But it is still possible for a chain-free sale to collapse. There are other reasons that they walk away from the deal.
Problems revealed in the survey can be a deal-breaker for chain-free buyers, too. And if the buyer’s financial situation changes unexpectedly, it can slow things down. The sale could even collapse.
Conveyancing delays and gazumping/gazundering are still completely possible with chain-free transactions, too.
Tips to stop a house sale falling through
Sell to a cash buyer
You can avoid the risk of being in a housing chain by selling to a chain-free buyer (also referred to as a buyer with no onward chain).
If you can find one, then this is worth considering. If your property is in the appropriate price range, first-time buyers are a common example.
Organise your paperwork
You should follow up with your conveyancer to avoid delays or mistakes. This guarantees that you are a priority for them.
Get all your essential documents completed in-advance. Examples include:
- Energy Performance Certificate (EPC)
- Proof of funding
- Mortgage in principle
- Proof of identity
Beware of gazumpers
Even though it can be tempting (as a seller) to accept a gazumping offer, it is not always a good idea to do so.
Gazumpers may be lying about the amount they are willing to pay. They might not be a trustworthy buyer who will follow through on the deal.
It is often best to stick with the buyer you’ve already got, if you trust them.
