House Sale Fallen Through What to Do and Why House Sales Fall Through
- 1 What does a fall through mean?
- 2 Why do house sales fall through?
- 2.1 The buyer is denied a mortgage
- 2.2 Survey reports indicating structural problems
- 2.3 The property gets appraised lower than the asking price
- 2.4 The buyer is unable to sell his/her home
- 2.5 Outstanding liens or a title dispute
- 2.6 Inexperienced estate agents
- 2.7 Problems with the completion of documents
- 2.8 Buyer’s remorse
- 2.9 Gazundering and Gazumping
- 2.10 Solicitors
- 2.11 Market conditions
- 3 What to do if your sale has fallen through?
- 4 What are the other ways to sell your house?
- 5 Looking to sell your home?
- 6 How can we help you sell your house fast?
Selling a house usually takes many steps and much effort, so even if sellers and estate agents know better than to uncork champagne before the deal is successful, it can be hard to resist. But you really shouldn’t celebrate just yet. Stats show that property transactions do fall through from time to time. In 2019 alone, about 25 percent of house sales in Wales and England failed before completion, with the main reason being a change in mind on the buyer’s part.
The news that your house sale has fallen through can surely be disappointing. In some cases, you can blame a failed deal on the buyer’s financial situation; in others, the estate agent has every reason to do with it; and still, in some cases, there’s no one to blame but a diffident market.
Selling the house to an investor is always the best alternative. Investors are people or entities with cash reserves to purchase old properties to refurbish and let. Unlike other buyers who mostly depend on mortgages that may get rejected, selling to an investor guarantees a quick sale with the potential for flexible terms.
Looking to sale your house without going through the hassles of dealing with a diffident market or inexperienced mortgage buyers? From distressed to off-market properties, we are experienced cash property buyers and will enthusiastically appraise your house with the hope of making you a binding offer.
What does a fall through mean?
If a property deal is said to have fallen through, it means the sale has failed because the buyer has withdrawn his/her offer. In a standard property deal, the buyer and seller have to commit to specific terms and conditions, but just because you’ve received an offer doesn’t make it a done deal. The England and Wales property transaction system is inefficient. Private treaties are not legally binding until contracts are exchanged.
From the time you accept the buyer’s offer until the final step of the transaction, a property sale is said to be pending. Usually, there are 50 days between the offer and completion of the sale. During this period, a lot can go wrong, taking the offer off the table.
It can be very heartbreaking to learn your house sale has fallen through. At the very least, a failed property transaction can be inconveniencing and expensive. Not only will you feel bad, but when you fail to complete a sale, you may end up financially devastated, especially if you spend your cash advertising the property. You will also have to pay your solicitor.
Why do house sales fall through?
Property transactions fail because of various reasons, and while some reasons are completely beyond your control, others are totally avoidable. Understanding the alternatives available to you can help avoid stress.
Here are the categories of reasons some house sales fall through:
The buyer is denied a mortgage
If you are selling a property on-market, you have to assume that most buyers will be using mortgages and verify that the buyer has received an agreement in principle’ from the lending company. Without an AIP, it’s unlikely the buyer will be able to afford the house.
But even if they have an AIP, it doesn’t guarantee they will receive financing. Lenders can always change the specifics of the deal if the buyer’s financial circumstances change. If the contract has a financing contingency, the buyer may possibly leave without penalty.
Survey reports indicating structural problems
Most buyers want a house that’s ready for use, not one that needs a bit of fixing. They’ll require a home inspection before contracts can exchange hands. Now every property will have problems; the key is to keep issues minimal. If the professional home inspection unearths major deficiencies requiring big-time renovation projects, the buyer may use such findings to strangle you on the offer or back out altogether.
The property gets appraised lower than the asking price
Buyer’s mortgage companies, too, look at professional’s appraisal and inspection reports before approving mortgages. If the house is appraised lower than what you asked for, they may decline the mortgage or approve only for the amount in their reports and ask the buyer to provide the rest.
The buyer is unable to sell his/her home
A slow chain of properties on the market can also cause property transactions to fail. Many property movers belong to a chain involving buying and selling a house at the same time. This may not be easy because while most homes are saleable, some take longer than others for many different reasons.
If you receive an offer on your house from a buyer that has to sell their house first, don’t count on the deal because if the buyer is unable to sell their home, they won’t have the finance for your house.
If you agree to a house sale contingent offer, always keep in mind the existing market conditions. For example, take a look at the DOM. DOM stands for Days on the Market; the average DOM can give you an idea of the length of time it takes a property to sell.
Outstanding liens or a title dispute
Nobody in their right mind is going to purchase a property with outstanding judgments, a title dispute, unpaid contractors, or even taxes. Before finalising the deal, the buyer will get professionals to verify that it’s clean on all accounts. A home with outstanding liens and title issues takes a long to sell because resolving the issues takes a while.
Inexperienced estate agents
The job of estate agents is to facilitate transactions. They work with their clients to find suitable properties or buyers. They’ll list your property, market it, and prepare it for showing, and work to convince buyers to make an offer.
But sometimes estate agents mishandle property transactions, and poof -the offer is gone. A bad estate agent won’t keep up with contract dates and do proper follow-ups. They will also have little patience through negotiations, scaring potential buyers away. With a bad estate agent, your property is going to be sitting on the market for quite a while.
Problems with the completion of documents
For a property transaction to complete successfully, there are some documents that have to be reviewed by the solicitors representing all the parties involved. If there are major issues with completion documents, a property transaction can fall through. Some of the most common problems with completion documents include outstanding liens, missing heirs, previous bankruptcies, public record errors.
Buyer’s remorse is when the person who presented an offer on your property experiences a change of heart and opts to continue renting instead of buying.
The exact reason for buyer’s remorse is hard to pinpoint, but inexperience has something to do with it. First-time buyers, especially, tend to overestimate the amount they can afford or misjudge the timeline, then feel overwhelmed near the finish line and use a contingency to exit the contract.
Gazundering and Gazumping
Okay, ladies and gentlemen, we are not talking about fairy tale characters here; these are words used to describe property buyers and sellers’ behaviour. Specifically, gazundering is when a buyer reduces their offer on your property last minute.
On the other hand, Gazumping is when you find yourself a much better offer than the one offered by the existing buyer. Gazundering and gazumping may be fun terms, but you don’t want to get caught on the nasty side of either.
Sometimes lawyers take too long to finalise the legal documents involved in the transaction. With increased property fraud and litigation from displeased buyers, solicitors take their time to reduce errors in property transactions and leave everyone happy, but that also means some buyers may get tired of waiting and exit the deal.
The property market is not fixed; it’s always rising and falling due to various factors. When the property market gets bad, most buyers put a pause on their big plans. For example, with the present uncertainty brought about by COVID and Brexit, most buyers have adopted a ‘wait and see’ attitude meaning the number of successful of transactions is now very low.
What to do if your sale has fallen through?
Spotting the signs of a transaction falling through can help take a different approach and save on time. Sometimes all it takes is just switching estate agents and or move to a new buyer. At other times, the matter can’t be helped. Still, you need not panic; you have a few options to consider.
What are the other ways to sell your house?
You always don’t have to use estate agents to sell your house. In fact, chances of a sale falling through only happen when selling through an agent; alternatives like auction sale or selling to an investor guarantee cash.
Here’s a look:
An auction sale
One alternative you have to sell your house is through an auction sale. You can sell any property at an auction. Selling your home at auction is a drastic tactic. However, it guarantees results because the house is repeatedly marketed until contracts exchange hands and the buyer deposits 10 percent of the price in your account with a legal obligation to pay the rest within 28 days.
Agreements are legally binding in an auction sale. The buyer cannot change or exit their offer. The only con is that if your property is in bad condition, those bidding on it will be aware. But even so, you may end up with a lot of bids and a better offer than your asking price.
A direct sale involves selling your home to cash buyers. Most home buyer companies are investors who buy homes to refurbish and rent out or sell. Direct sales are not chain-dependent, and you are dealing with someone who won’t exit the deal because of issues in your home. Investors don’t look for properties to live in; they want to refurbish and sell or rent out.
That said, watch out for entities that masquerade as cash property buyers only to ask you to pay a fee and sign many documents. Avoiding property agents only to be duped into dealing with such companies achieves nothing.
You can always tell a direct sale from other sale deals by watching out for companies that ask you to sign other stuff apart from the contract of sale prepared by your solicitor. You won’t be required to sign anything else apart from the contract if you sell to cash buyers.
Looking to sell your home?
We are cash property buyers in the UK with plenty of experience dealing with homeowners looking for a quick transaction or whose property is not attractive for mortgage lending. We will happily assess your property with the hope of making you a binding offer. You won’t have to pay any fees!
How can we help you sell your house fast?
We are cash buyers. Unlike other buyers who depend on mortgages, we pay cash. There’s no risk of closure like mortgage buyers whose loan may be stopped by the lending company anytime their credit status changes.
We buy property as is; no need to drive yourself crazy, trying to make everything perfect. From derelict properties to those structural defects, damp, wet or dry rot, and even unusual construction, we buy homes in all conditions. The renovation costs fall on us.
We offer flexible purchase agreements. What causes a break in most property sale negotiations is the lack of flexibility. What terms do you want? Tell us; we can make it work.
If you suspect a fall through because the buyer is inexperienced and may have problems obtaining money for the purchase, please get in touch with us for a free quote. We provide a straightforward way to get a committed offer on your house despite its condition. We are transparent in our transactions. We will buy your home quickly at fair market value. Contact us today for a risk-free quote.