A UK house sale may fall through for as simple a reason as a change of heart, but there are several other circumstances that lead to the buyer being unable to go through with the transaction. Research by the property buying company Quick Move Now claims that a quarter of transactions fell through between an offer being accepted and its completion in 2019.
This percentage is the lowest recorded since 2013, but it still marks an expensive and frustrating problem for both buyers and sellers.
Common Reasons House Sales Fall Through in the UK
Below, find some of the most common reasons house sales fall through in the UK. From mortgage application problems, to delays with conveyancing – there are many reasons why a house sale may not go through.
1. Mortgage Problems
Mortgage offers falling through is a problem that can arise when a buyer’s mortgage offer either expires, or there is a change in circumstances meaning that they can no longer borrow as much money as they require.
However, an effort can be made by both the buyer and the seller that can help to ensure this issue is not encountered. As a seller, you must ensure that the buyer can provide evidence that finance is in place before accepting their offer. In turn, buyers should secure a mortgage agreement in principle (a statement from a lender to say that, ‘in principle’, they would lend you a certain amount) which should generally be valid for six months.
2. Problems with a House Survey
A house survey is an expert inspection of a property’s condition, which identifies problems for a prospective buyer. A surveyor will complete it upon a visit to a property, whereupon an inspection and report will be filed. Home buyers generally have a survey done on a property after their offer has been accepted by the seller.
The surveys can uncover a range of problems, from smaller cosmetic issues to major structural ones, and if they find a major issue, the buyer may look to renegotiate the price or pull out of the deal completely.
To avoid running into this problem, buyers should make sure to seek a suitable home survey, and sellers must consider having a survey done on their home before putting it on the market. This should especially be considered if it is an old property or in need of renovation, to ensure that action can be taken to fix anything that could put a buyer off.
3. A Break in the Property Chain
A property chain is the string of transactions linking a line of buyers and sellers. A chain may break because of a change in circumstances, a problem arising with a property or a mortgage offer falling through.
A sale collapsing can result in the entire chain being broken, which may leave many people out of pocket. This problem can primarily be resolved by estate agents and conveyancers, who are responsible for keeping the chain moving.
As you can only control your own part in the property chain, it is important to make sure you choose a good conveyancer, provide key documents when required and answer any queries promptly.
4. Conveyancing Delays
Buyers losing patience and sales falling through can be the result of delays in the conveyancing process. The legal practicalities of buying a house can take time, and so the best way to get ahead of the game is to instruct a conveyancer early in the process.
Sellers should ideally find a conveyancer as soon as they put a property on the market (rather than after they accept an offer) and buyers should instruct a conveyancer as soon as they start making offers.
5. Gazumping and Gazundering
These fun-sounding words are, in fact, two notable issues that can cause a house sale to fall through. Gazumping is initiated by the seller, whilst gazundering is brought about by the buyer.
The former happens when the seller of a property finds a buyer who is willing to pay a greater sum than that which has been offered by the current buyer. On the other hand, gazundering is where the buyer lowers their offer on a property that they have shown real interest in (usually at the last minute).
Both trigger equally problematic issues that are some final central reasons as to why a house sale is caused to fall through.
How to Avoid a House Sale Falling Through
If you’re looking to sell your house quickly, or would like a smooth process, then there are a few ways to ensure the house sale doesn’t fall through. Nonetheless, house sales often do fall through due to uncontrollable circumstances on both ends, and there are times where you may just not have the best of luck. Yet, here are some quick tips to help secure a house sale (whether you’re a buyer or seller):
- Ensure buyers are in a serious position to secure the deal (get evidence of finances)
- Sellers should be realistic about the value of the property (get valuations from several estate agents)
- Buyers should only make serious offers
- Buyers should have a mortgage in principle before viewing or placing offers on homes
- Sellers could consider cash-buyers only for a quicker sale
- Old property homeowners should get a survey done before viewings or offers are made
By following some of these steps, both buyers and home sellers can avoid any mishaps or problems along the way. However, selling a home should never be rushed and if an individual wants to sell a house quickly, then they should especially ensure all the right steps are put in place to avoid sales falling through.