Why do Sales fall through?

Finances

In my experience, this is the number one reason why transactions can fall through. Being pre-approved or having an ‘AIP’ Agreement in Principle on a mortgage does not constitute a mortgage offer. Anyone can go to a broker or their bank, conduct a screen check and receive an ‘AIP’ towards their next home.

There are many homeowners that I come up against who believe that this is a mortgage offer, but it isn’t. Truthfully it is not worth the paper it is written on and the only way to find out is to proceed with a purchase of a property and carry out a full-blown mortgage application. The lender will then really look deeper into the buyer circumstances such as their credit history, sickness, job history, wages and any other expenses or loans. If someone goes with the wrong lender or has set their life up badly through their finances, they cannot obtain approval on their mortgage. Nowadays, there are a lot of situations and decisions that can make the lender give the applicant a negative response.

Most agencies will check as much as they can regarding the deposit, IDs, and AIP of a buyer, but the broker/lender will hold all the cards in this department.

In my professional experience, if someone is waiting (for what feels like) too long for their survey or mortgage offer, and you feel a hunch, then there is usually something that the buyer or broker is not telling the estate agent or the homeowner. If you are using an experienced estate agent, they will usually smell a problem.

Gazumping or Gazundering

Why do these words always make me laugh? There is nothing funny about the reality of it, but the terminology states that Gazumping is when a seller has already agreed on a sale to a buyer but chooses another buyer who has maybe offered them more money and Gazundering is when a buyer ‘does the dirty’ and lowers their offer at the last-minute right before exchange.

Out of principle, I would rather not sell a house to someone who Gazunders, in my opinion, it shows a bad character and goes deeper than usual.

It is not too common, but it does happen, it does leave a sour taste in one’s mouth.

Survey

There are three types of surveys. The mortgage valuation, homebuyers, and structural survey. The latter is more in-depth than the others. Again, this can be linked to a buyer getting the price down and does make a seller and the agent nervous when a buyer conducts a full structural. If you put a surveyor into a house, usually they will find some issues which is what a buyer pays them for.

It all depends on how the buyer takes the issues and if the issues are serious or not. I have seen surveyors telling buyers to get the electrics checked and the boiler checked with the buyer wanting to take the price off a few central heating systems as well as a re-wire without any solid evidence that it needs doing.

Not all buyers look for a structural survey to get their sellers price down, some people just want to know what they are walking into and if there are structural issues to a property, then quite rightly a surveyor is the professional that will highlight them.

However, if there are things highlighted and the seller doesn’t agree with the surveyor’s report, there is an issue, and this is a reason that a sale can fall through.

Chains

Most sellers would prefer someone who is not in a chain as there is more control over the sale and you are not relying on anyone else. This is a reason that sales often fall through.

The more people there are in the chain, the more chance of problems and the more chance that the chain will collapse. If there is a chain of 5 properties, and one of the properties falls through, then no one moves until the person with the issue resolves it with another property or another buyer, alternatively, they break the chain and move out somewhere else until they become an unincumbered buyer themselves.

I have seen that sales go right through until the end, the stress, toil, and work that goes into it amounts to nothing and the sale falls through, it is not very nice for anyone involved.

Personal circumstances

Sometimes it just isn’t meant to be, some people have a change of heart and don’t want to follow through with the purchase or the sale. Life happens and there is not always an explanation and not always any control. The horrible thing about property transactions in the UK is that it can take months to exchange properties, therefore, the longer timeframe for issues and problems to arise.

But…don’t be disheartened by any of this! Around 80% of transactions do successfully go through, plus at least 60% of the property transactions falling through are preventable so it is even more important that you make the right decisions.

Sometimes it is inevitable and negative surveys or someone having a change of heart cannot be helped but there are a lot of things that can be helped to make the transaction quicker. The quicker the property transaction, the less likely the transaction will fall through. The longer it takes then the more chance it will have.

What to look for to limit your risks of a property transaction falling through

Solicitors are a reason why quite a lot of sales fall through, like anything, some solicitors are better than others, but there is nothing worse than progressing a sale with a solicitor that has too much work on their plate or cannot communicate. With any transaction in any field or industry, communication is key.

There are many times that we have dealt with solicitors that do not or will not speak to the estate agents in the transaction because they believe it is not their job to do so. However, the issue arises when the client of the solicitor doesn’t know how to handle the situation or what to say because they do not speak the same dialect as the solicitor, therefore, there is a risk that the transaction can go stale and go nowhere. The issue here is that nobody apart from the solicitor knows what is happening with the sale or purchase and the communication throughout the chain is limited, meaning people get stressed, frustrated, and upset transmitting into property transactions that are more than likely to fall through.

My advice here is to do your research when it comes to the solicitors and go on recommendation (not just on the company) but the actual solicitor who will be handling your case. Be very wary when the market is busy or you are conducting a property transaction through the holiday season because if the solicitor goes on holiday without someone looking after their case, then it means your case will not go anywhere neither.

A lot of estate agents recommend solicitors too, which could be (not always though) a good route to take. Most agents and brokers receive a commission when they refer solicitors, so you need to take this into account too.

Online solicitors will be cheaper for a reason, a lot of them do not speak over the phone and only use email. Again, should your transaction be intricate or bespoke such as being based in a rural area then your solicitor could end up holding up the transaction, not always the case but beware and do your homework first.

Sales Progressors

Again, bad communication could be from the estate agency themselves, most estate agencies have sales progressors to make the transaction smooth and become the bridge between solicitor and seller/purchaser. If an estate agency doesn’t have a progressor, then it is more than likely they will have a negotiator, manager or director progressing the sales. Not that this is necessarily a bad thing, but most salespeople are always chasing the next sale so if they are a busy agency, have a holiday period or get a busy stage in their work then there is a chance that they could drop the ball on the sale.

Sellers or buyers not pushing enough

Believe it or not, to get anything in this world, sometimes you must make things happen. This is fine for the control freaks out there as this will be second nature to them, but for the opposite, this could be an issue. If you are the type who relies on everyone else, then I would say put reminders in your outlook calendar to push the solicitors and estate agents. If sellers or buyers are not pushing along solicitors, then sometimes their sales go to the bottom of the pile because professionals know that they will not get told off. This is not always the case, and I cannot tar everybody with the same brush, but this does happen, I have experienced it. So be on top of your case and sometimes you need to be the one that makes things happen.

Will I lose money if my sale falls through?

Unfortunately, the likelihood of this is that you will lose some money and there isn’t much you can do about it. Blame could be apportioned to anyone, but the reality is that sales fall through all the time and it is just the way the cookie crumbles sometimes.

You will lose solicitors fees, survey fees and any other fees that you may have paid upfront, this could attribute to between £0-£5,000 depending on the services and the plans that you obtain. E.g., Some solicitors do a no sale no fee service and some bank/mortgage valuation surveys are free of charge. Some brokers will not charge an application fee and so on.

The conclusion is this, do your research and if you want any help, wherever you are in the world, we can put you in the right direction, so please get in touch with us at Keystones.

How to save your property sale if you’ve had it fall through

Before we look at how to save your property sale if it falls through, let’s first consider what causes this to happen. If your buyer finds a better property or has an issue with their own sale, thus impacting their ability or desire to buy your house, then the sale will fall through.

If this occurs, then there are things you can do based on the urgency of your own sale and whether an onward purchase for your next home depends on your ability to part with your existing property quickly. The quickest and easiest solution is to conduct a sale through a house buying agency, who will complete a purchase quickly though at a reduced rate.

Alternatively, you can revisit your marketing plan with your chosen agency and either drop the price for your property a little to reignite market interest, or relaunch with some new professional photos and a fresh campaign to match.

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