Where and why – the danger points
Mortgage problems: This is the most common reason for a house sale to collapse. Your offer is accepted or you accept an offer and it’s all ticking along nicely when kapow someone doesn’t get their mortgage approved, usually for one of the following two reasons:
Down valuation: A down valuation is the price the bank or mortgage lender decides the property is worth, based on the current housing market and condition of the property. If the valuation is less than the agreed price then either the buyer and seller agree to renegotiate or the buyer needs to find the outstanding amount. If neither is an option it may cause the sale to fall through.
Buyers: be realistic, don’t let your heart rule your head. Recent sales on similar properties in the area should give you a clear idea of market prices so do your research and stick to your budget.
Sellers: don’t get carried away. Be prepared to give a little if there are genuine reasons for a down valuation.
Change of circumstances: Things change, sometimes it could simply be that the buyer’s Mortgage in Principle has expired (they’re usually valid for about six months) in which case it should be fairly simple to get it re-approved. But sometimes circumstances change in people’s personal lives, perhaps redundancy, relationship breakdown or the loss of a loved one.
Buyers: get your Mortgage in Principle arranged just before you start viewing so you give yourself enough of a window to find the right house and have an offer accepted.
Sellers: ensure the buyer(s) provide evidence of their financial circumstances. Your estate agent should check their Mortgage in Principle before you accept an offer.
A break in the chain: Typically the longer the chain the more chance there is of something falling down somewhere. Whether you’re a buyer or a seller, all you can do is keep things ticking along at your end. Respond promptly to queries and questions, sign and send documents in a timely manner. A lot rests on your conveyancer so choose a firm that is responsive and as keen as you to get everything tied up.
First-time buyers: capitalise on the fact that you’re chain free. It’s an attractive prospect to sellers.
Gazumping: This is when a seller accepts a higher offer from another buyer after already agreeing a price. It’s not unheard of in competitive markets. Hugely frustrating and admittedly not good form it is however perfectly legal. Until contracts are signed and exchanged nothing is legally binding.
Buyers: consider asking the seller to remove the listing from property sites and be sure to let the seller know how committed you are to the purchase. If you’ve got a large deposit or you’re chain free, make sure the seller knows.
Home Buyers Report or survey issues: Sometimes a home buyers report or survey throws up something unexpected. The buyer may try to negotiate the price or decide to pull out completely. As a seller you need to decide whether or not you’d be happy to lower the price. You may not be in a position to, but if you are, sometimes a little bit of flexibility can pay off and save the sale.
Conveyancing delays: Typically the conveyancing process takes an average of 12 weeks but there can be snags and delays along the way. This could be a local authority dragging their heels or it could be a case of the conveyancer putting your sale or purchase at the bottom of their in-tray.
Buyers and sellers: choose your conveyancing solicitor wisely. Get recommendations, do your research, check reviews.
When a sale or purchase falls through
Sometimes a house sale doesn’t go through – whether you’re the party who pull the plug or your buyers change their minds at the last minute – and you can be left feeling hugely frustrated. It’s tricky but there isn’t a lot you can do except stay focussed until you have successfully bought or sold. For that reason, we never charge legal fees if a sale or purchase doesn’t complete.
Brevis are committed to reducing the average 12-week conveyancing time. Find out more about how we work and how we can help you move home as quickly as possible.
