What costs do you need to pay if a buyer pulls out of the sale before exchange
If you do find yourself in the unfortunate position of your buyer pulling out before exchange of contracts, an already bad situation gets worse when you consider the fact that you are still liable for certain costs, namely the solicitor fees.
The exact amount that you have to pay will in part be determined by how much work the conveyancers had done before the buyer pulled out. If the buyer had pulled out fairly early in the sales process then the costs won’t is not likely to add up to that much but if the conveyancing was virtually complete when they decided to back out of the purchase then the costs could be substantially more.
It is worth noting that you might not need to pay these costs straight away, if you still plan to sell the house and use the same solicitors again, most will carry the costs over until the house is again sold.
Signs that your buyer might be thinking about pulling out of the sale
It would be great if you had a crystal ball that could tell you if the buyer was going to pull out of the sale before you accept their offer. Sadly, at time of writing, no such magic object exists but there are some tell tale signs to look out for that could indicate your buyer isn’t fully invested in the buying process or they are getting cold feet.
A sign that your buyer might not want to see the sale through to completion is if they are dragging their heels. If they are slow to respond to questions from your solicitor or if they say they are going to have a survey on the property but never quite get around to booking it this could indicate that the buyer is reconsidering the purchase or at least considering their options. Of course there are genuine reasons that a buyer could be slow to respond, if they are on holiday for example so don’t get too disheartened if they are a little bit slow sometimes but if the whole sale seems to have ground to a halt for some time then the alarm bells should start to ring.
A pretty big red flag is when a buyer wants to revise their offer. A change in offer will only ever be in one direction, down. If the buyer is looking to get a lower price for the house it could be due to a change of circumstances they are having financially, they could be finding it difficult to get a mortgage for the agreed amount or they could just be getting cold feet on the deal especially if the market is going through a turbulent time. Either way a reduced offer is a fairly concerning sign that your buyer might be about to withdraw from the sale. Even if you agree to the lower price there is still no guarantee that the sale will complete.
They do a houdini
Sometimes a buyer will pull the disappearing act of the century and will vanish all together, unsurprisingly this is a major red flag. Without a contactable buyer the sale is dead in the water and unless they are hiding behind a curtain somewhere waiting to jump out and shout “surprise” you should probably prepare yourself for the worst.
Your options if your buyer pulls out before exchange
If your buyer pulls out you have several courses of action available to you. Which one you choose is dependent on your circumstances and the need you have to get your house sold fast – if you have an ongoing purchase that you are at risk of losing if your sale is delayed or you just can’t afford to hold on to the property for much longer for example.
If you can afford to wait
Perhaps the best course of action, especially when it comes to getting the highest amount of capital for your house is to speak to your estate agent about getting your house back on the market, they might already have some potential buyers lined up that showed interest before your sale was agreed, if not you are essentially starting the whole process again from scratch, which could take up to 6 – 9 months or more before you eventually get a sale over the line.
If you can’t afford to wait
If you simply have to get the sale done no matter what you still have options, although you will likely have to compromise on one thing, the price.
Renegotiate with the original buyer
The buyer that pulled out could be a good place to start, especially if they were just suffering from cold feet. You could offer them a reduced price to go ahead with the sale. However this might not be possible if they pulled out due to mortgage issues or a chain break.