Whether you are buying or selling property, one thing everyone dreads is the thought of their property transaction falling through. At best, it’s inconvenient; at worst, it can be financially devastating. Unfortunately, house sales do fall through from time to time, but why do they? Is there anything you can do to help protect yourself from this regrettable fact?
Why house sales fall through
The reasons why house sales fall through are plentiful, but they can be bundled into broader categories:
Having a survey conducted is essential if you want to protect yourself from buying a property with problems, so it’s obvious that they can sometimes be the cause of house sales falling through. While it may seem an obvious cause, the truth is that poor survey results actually account for very few property transactions falling through as minor niggles can often be quickly put right, or a price adjustment can be negotiated between the buyer and seller.
On the rare occasion where a property is found to be structurally questionable, the buyer will naturally pull out and the deal will collapse. The seller will then have to address the issues raised before trying to find a new buyer for their property.
Should the property have major structural issues, agents are no longer allowed to remarket a property without informing new buyers of the problems found. Even once any issues have been addressed, it is now necessary for agents to disclose that they were discovered and fixed.
While it is possible to remarket a home with structural issues without fixing them, the price would need to be adjusted accordingly. This could also result in the property being deemed suitable for cash buyers only, which would limit the market significantly and, again, result in a further drop in price to make the sale more attractive.
In the main, sellers are usually unaware that their property is in need of repair until a buyer’s survey highlights the property’s problems, so thoughts of deceit should generally be disregarded.
Despite what many people believe, being pre-approved for a mortgage does not necessarily mean that your financing will go ahead. An agreement in principle means just that: all seems well, but the details have not, as yet, been finalised.
There are numerous reasons why a lender may change their mind over a mortgage offer. Anything from a falsely filled out application form to a change in circumstances, such as a job loss, can elicit a negative response.
Gazumping and gazundering
While these words may be fun to say, they’re no fun to be on the wrong side of. In short, they are really two sides of the same coin: one is initiated by the seller (gazumping), while the other is brought about by the buyer (gazundering).
Gazumping happens when the seller of a property finds themselves a buyer who is willing to pay a greater sum than that which has been offered by the current buyer. Gazundering, on the other hand, is where a buyer lowers their offer on a property they have already shown a real interest in, commonly right at the last minute.
Neither practices are pretty and will do nothing to strengthen your faith in humanity, but they do happen, unfortunately.
Change of heart (or circumstance)
Sometimes, property transactions can fall through because of nothing more than a change of heart or personal circumstance. This can be extremely frustrating, especially when you are financially tied to the transaction going through, but there is little you can do once the decision has been made to pull out.
Chains can be a problem when buying and selling property, with as many as one in five property transactions falling foul of a broken link.What causes a chain to break? Well, there are a number of reasons, including those we’ve already mentioned above.
Basically, any reason for a transaction not going through somewhere along your ‘chain’ will cause problems. Ideally, a short chain or no chain at all is preferable, but it’s not always practical or possible to find one.
What can be done to prevent a house sale falling through?
The above may sound disheartening and seem as though there is little you can do to prevent a house sale from falling through. The truth, however, is somewhat different.
Around two thirds of ‘fall-throughs’ are preventable, and many can be avoided simply by speeding up the process and having the right people by your side throughout. While there may be little you can do about a truly negative survey or failed financing, things such as changes of heart and gazumping and gazundering can be avoided with efficiency and swiftness in procedure.
How do you achieve this? Two areas are the main causes of bottlenecks in the buying and selling process - estate agents and solicitors - so choosing wisely can make all the difference.
Choosing a reputable estate agency with a dedicated sales progressor is one of the key things you can do to ensure that your transaction is moved along swiftly, thus lowering the chances of circumstances changing and feet getting cold.
Similarly, solicitors with good standing will appreciate the need for a fast transaction and do all that they can to push the deal through as quickly as possible, so seek them out whenever you can. In both instances, word of mouth can be a great help here, so ask around for thoughts.
A word of warning here, though. Some estate agents will receive a commission from solicitors for a referral, whether they are fit for purpose or not, so be sure to do your own homework before you commit. This is something we avoid as a rule, so we only recommend on performance. Should a solicitor begin to show signs of holding up sales, we no longer refer customers to them, it’s as simple as that.
You, too, can play your part. If you feel as though things should be moving faster than they are, be proactive. Pick up the phone to your agent or solicitor and ask for an update. Both should be happy to give you an answer and provide you with a timescale wherever possible.
Here at Pettys, we make a point of keeping both buyers and sellers in the loop at all times and our professional sales progressors are adept at keeping the ball rolling, which naturally minimises the chances of transactions failing. While you will never be 100% guaranteed that your property transaction will go through without a hitch, moving things forward quickly and efficiently is still key to success.
Our team includes a number of staff members who have worked locally for most of their careers, and their experience is second to none. Why is local knowledge so important? Well, amongst other things, we will often deal with several transactions in the same road or block of flats, and that enables us to foresee any problems that may arise before they become an issue, for example.
Similarly, good local solicitors are better than national conveyancing companies as they will generally have an existing relationship with freeholders in the area, which can save a huge amount of time (sometimes many weeks) tracking them down. Not only does this speed the process up, it can also save sales, too.
So, if you are looking to enter the property market any time soon, be sure to choose a fully accredited agent and reputable solicitor to fight your corner. If you would like to discuss your options further, please do not hesitate to get in touch with our sales team on the numbers below.