It can be frustrating when your house sale falls through, particularly if it means missing out on your dream home. B P Collins’ residential property team examines the reasons why this frequently happens and how to avoid in the future.
Mortgage issues are quite common when selling a house. Lenders sometimes value a property at less than the buyer has agreed to pay. This is known as a down valuation, which means buyers face the possibility of either renegotiating the house price with the seller or shortfall. Sellers should ask for valuations from several estate agents before listing the property and be realistic and reasonable about its value.
At other times, mortgage offers can collapse due to the buyer’s mortgage offer running out or a change in circumstances, meaning they can no longer borrow as much as they require. Sellers should ensure that their estate agent has checked sufficiently that their buyer can provide evidence that they have the finances available before accepting their offer.
Delays in the conveyancing process can result in buyers looking elsewhere and sales falling through. The legal practicalities of buying a house can take some time – either due to delays in documents arriving, slow local authority searches, or an unresponsive lawyer elsewhere in the chain.
When selling a house there are also a large number of standard forms that all sellers need to complete. This can be a lengthy process. If you instruct a solicitor at the same time you instruct your estate agents, you have the opportunity to work on these key documents then rather than having to do it quickly when a Buyer is found and will allow more time to get everything in order.
A break in the chain
A property chain is when a series of house transactions are linked together, and just one seller or buyer pulling out can result in the whole chain breaking and causing the people involved to lose money. Chains can collapse for a whole variety of reasons, including changes in circumstances, mortgage offers falling through or a problem with one of the properties.
Experienced residential property lawyers and proactive estate agents should ensure the chain keeps moving. However, you can only control your own actions, so always choose a reputable property lawyer, promptly provide all documents when required and address any queries as soon as you possibly.
Buyers can be unpredictable, which is why a seller can ask for a payment from an interested party to grant exclusivity, known as a lock-out agreement. But this is not as straightforward as it seems, as it can involve adding another level of negotiations that focus on whether the payment will be non-refundable or only returned under certain circumstances – such as a down valuation or if the house survey has found problems. In any case, it cannot guarantee the sale of a property and negotiations around this could distract both parties from moving forward with due diligence.
Nearly a third of all house sales fall through at least once before completion*. To help avoid this happening to you, or if you require advice on any residential property matter, please contact B P Collins’ residential property team at firstname.lastname@example.org or call 01844 397397.