DON ’ T LET YOUR SALE OR PURCHASE FALL THROUGH
PROPERTY
For this issue , Caroline Doman , Senior Associate at Blanchards Bailey ’ s Residential Conveyancing department , shares the top reasons why property transactions can fall through and offers her expert advice on how to prevent this from happening
Searching for a new home or selling a current property can be an uncertain , yet exciting time in life . Moving home often coincides with larger life changes and can come with a wide array of emotions . One thing is certain though – the buyer or seller will want to be sure that their sale or purchase will complete . Unfortunately , many things can happen between an offer being accepted and exchange of contracts that may cause the initial agreement to collapse . In the past two years in the UK , three out of ten homebuyers have seen their purchase fall through , despite having had their offer accepted by the seller . In addition to causing uncertainty , having a purchase fall through is also costly . The process of buying a house is a lengthy one , taking two to three months on average , and during this time expenses can accrue for legal fees , surveys , mortgage valuations and brokerage fees . Purchases can fall through for a variety of reasons , but
knowing what to look out for can help to protect you against any interference .
TOP REASONS PROPERTY DEALS CAN FALL THROUGH Buyer financing rejections : If a buyer ’ s application for a mortgage is rejected , they will not be able to follow through with buying the property . Before accepting an offer , sellers should ensure that the buyer has obtained a mortgage in principle , which makes it more likely that they will receive final approval from the lender to proceed with the purchase . You should also ensure that you or your agent follow up with the buyer throughout to ensure that their mortgage application is on track .
Valuation is lower than the sales price : A lender will only lend up to the value of the property . If it is appraised at a lower amount , the buyer will not be able to secure the full mortgage and will potentially have problems making the final purchase .
Buyer cannot sell their own home : If the buyer must sell their home in order to purchase a new one , be wary . This is known as a ‘ chain ’. Problems can arise if there is an issue with their sale . This may cause delays which can have a knock-on effect on everyone in the chain and lead to sellers pulling out .
TIPS TO PREVENT THE DEAL FROM FALLING THROUGH Know the warning signs of a buyer or seller backing out : Failing to return papers , make payments to third parties , not returning phone calls or missing appointments are all signs of cold feet .
Understand the buyer ’ s circumstances : If your buyer has a related sale , make sure that they have accepted an offer and the sale is progressing at a reasonable speed . If your buyer is in rented accommodation , ensure that they are able to serve notice and leave the property .
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