What Are Your Options if a Property Sale Falls Through?
It is incredibly frustrating and demotivating to hear that you house sale has fallen through. You signed a contract with an agent, took the time to clean up your house for viewings, let potential buyers closely inspect it, eventually receive an offer, and then the sale falls through.
Sales fall through on the open market at least a quarter of the time, creating great stress for all the buyers in a potentially lengthy chain. Even worse, you might not be able to buy your new dream house because of it.
This is more likely now due to coronavirus, viewing restrictions and general uncertainty. It is important to stay calm and motivated to sell your home, even in these unprecedented times.
Why could a property sale fall through?
Often the reason for a sale falling through is not because of seller fault. The most common reason is mortgage disruptions or delays, such as the buyer not meeting the lender’s requirements, or the lender valuing the house less than the offer. If the buyer is unable to pay the difference in value alone, they might have to withdraw.
Other reasons include:
- Conveyancing and paperwork delays
- Change of mind
- Change of circumstance, for example financial, divorce
- Gazundering – when the buyer lowers their offer last minute
Whilst not always preventable, staying in contact with your buyer after they make an offer can build trust and ensure they don’t change their mind. Check in with them directly and honestly answer any questions they have.
At the same time, ask the owner of your new property if they can give you more time. After all, this avoids them looking for a new buyer as well!
In the UK, an offer by private sale through a high street estate agent is not legally bound. Only when the contracts have been exchanged and signed can you have some certainty in the sale.
What are your other options for sale?
If the open market has failed to sell your house and contact with your estate agent has not met your needs, you may be interested in one of the following sale methods.
Sale by auction
One way to ensure the offer is accepted and followed up with a sale, is through a property auction. There are several pros and cons. For example, auction is helpful for quick sales, and when the property needs too much work on it for a typical buyer.
However, auction is not for everyone, as the guide or reserve price can be set low to attract more buyers. The intention of this is to generate more competition, and hopefully a bidding war and higher final price. This is not certain, though.
In this sense, there is risk involved in auction, despite it being a method that cannot fall through. Thinking of selling your house on eBay? Our guide to selling without an estate agent may help
Home Equity Release Schemes
For older homeowners who may want equity released for retirement, home equity release schemes may be of interest. In the scheme, your house is mortgaged or sold to the provider, allowing you to stay in the house for the rest of your life.
You generally receive up to 60% of your home’s market value in a lump sum but cannot pass down your home to family. If you consider this option, make sure to get some solicitor advice to ensure it is right for you.
Some developers, such as new builders, offer a part-exchange option. They will buy your house from you in exchange for one of theirs. The best developers will arrange a second independent valuation to ensure their offer is fair.
This method does not have a chain of buyers, so there is not any risk of another participant affecting your sale. and you do not have to advertise, so this way can provide some guarantee.
Quick sale companies
Another option is to sell through quick-sale companies. Finding a new buyer through the open market can be time-consuming. It is comforting to know your sale is certain so that you do not lose your new home in the meantime.
With SOLD.CO.UK, you sell your house for free, making the process much easier than if you were dealing with a high street vendor.
You’ll receive maximum profits because quick sale companies rarely charge fees. SOLD.CO.UK even pay your solicitor fees. A traditional estate agent typically keeps up to 5% of your sale plus 20% VAT.
If you need further advice to keep your house sale on track, or if your house sale has fallen through, contact us today to see how we can help you sell your property.