No one wants to get that disappointing call of a buyer backing out midway through a house sale. It may be not very pleasant, considering the efforts and time already invested. But the truth is nearly a third of all house sales through estate agents fall through. This is also known as a broken house chain.
In this article, we discuss the situations surrounding a buyer pulling out of your house sale – how you can reduce the chances of such an occurrence, how to protect yourself, and what next to do if it happens.
A potential buyer may withdraw from a sale process for different reasons. However, the most common reasons are problems related to finance and a sudden change of mind or the discovery of another property.
The decision of buyers is also influenced by issues related to the current property. For instance, when a buyer finds out they need to make major renovations or repairs, they might be discouraged. The same applies to issues related to surveys, documentation, and paperwork. If your buyer is relying on a property chain, they may pull out of the sales process if they lose their house sale due to their own buyers pulling out.
In England and Wales, a buyer may withdraw their offer on a property without any consequences prior to exchange of contracts. The buyer is only legally obliged to purchase the home after a successful exchange of contracts. If they withdraw before the exchange, they do not have to pay any costs. This is slightly different in Scotland where a buyer will have no penalty from pulling out of a house sale prior to the missives being concluded, once the missives have been concluded if the buyer pulls out they will generally have to pay damages to the seller as per there agreement (missives).
Buyers pull out of home sales for a number of different reasons and at different times. In some cases, they back out when you have already accepted their offer, and in other cases, before you have accepted their offer.
Below are a few useful tips you can adopt to help prevent your home sale process from falling through:
Doing your homework can help you know who your buyer is really is. For instance, it is common to see buyers portray themselves as cash buyer despite not having the means to fund the purchase with 100% cash.
Getting the finer details of a buyer and how they want to purchase your property can help identify a problematic buyer from afar.
You need an agent that will take on your home sale project as their priority. The failure of your estate agent to focus on the sales process may prompt the buyer to back out of the deal even before exchange. Check-in with your agent regularly for updates on buyers’ interests and all they are doing to get your property off the market.
Effective communication is key to ensuring your buyer stays in the deal till the end. This could be getting their phone number during inspection or arranging physical meetings for follow-up discussions. Having a rapport with your buyer makes it harder for them to back out because they wouldn’t want to let you down.
Buyers tend to pull out of a sales process if the seller is taking too long to provide the necessary paperwork. As a seller, you must ensure all the required papers are with your solicitor. Outstanding forms and papers will most likely discourage a buyer.
Working with a reliable buyer with the right mindset will ensure smooth and timely sales. They make the entire process seamless while guaranteeing prompt payments.
How do you manage the situation?
Unfortunately, despite putting in all the efforts, including the tips above, you may still get that call informing you that your buyer has pulled out. How do you manage such a situation? We have some helpful tips:
It can be frustrating to have a buyer pull out of a sales process nearing completion. But this is not necessarily the end of the world. You have only lost a buyer, you still have a good chance of selling your property to another buyer who might be in a position to complete the purchase quicker.
While the buyer is not under any obligation to buy your home, there is most likely a reason they pulled out. In most cases, they relay the reason behind their decision to your estate agent. So, speak with your agent to see why.
In some cases, the problem might be a minor and rectifiable issue. If not, you will be better prepared for it when dealing with the next buyer. And in other cases, you may not be the party at fault.
Although it is best to discuss the next step with your agent, the usual way forward is to get the property back on the market. If there are prior interests on the property from other buyers, your agent may help reactivate such interest. In the absence of such, you can start working towards fresh interests from new buyers.
Selling your home takes time. You should know this and not rush or pressurize your real estate agent into finding the next buyer in no time. These professionals understand how much you want your property off the market, and they do all they can to get you ready to proceed again in no time.
You may consider selling your property to a quick house buying company such as Sell My Home Now, a company like this can offer you a solution to fix your broken house chain buy purchasing your property for cash much faster than any other traditional route can offer such as estate agents. You won’t get the full market value for the property, but this could be a good option to prevent you from loosing out on your next property.
If a buyer pulls out of a sales process, the seller may incur financial costs such as legal/conveyancing fees, legal searches, and surveys on purchase properties. The only way to avoid these costs is not to pay out any fees until the buyer has done the survey and ready to proceed to the next phase. With the buyer incurring the fees of their own and submitting an offer, they are more likely to see the sales process through.
Did your buyer just pull out of a home sales process? Not to worry, we can help! Our team of experts is always ready to offer professional advice on the best way to proceed and ensure you get your home off the market as soon as possible.
Call us today if you need any help fixing a broken house chain on 0800 644 5311.
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