According to Which? as many as 25% of house sales failed to complete in 2019 and this was the lowest figure since 2013. Statistics published by the Land Registry show that in one month alone – July 2019 show that 84,694 homes were sold which means that a 21,174 sales were not completed. This astonishing figure represents a huge number of disappointed sellers and buyers plus a huge amount of wasted time and money.
We look at the 5 reasons why house sales fall through and suggest ways in which they can be avoided.
1. Problems with the mortgage
Sometimes the mortgage provider under values the property- at a price lower than the buyer has agreed to pay to the seller. This situation is called a ‘down valuation’ When this occurs, there are two options for the buyer; they either have to renegotiate their mortgage or try and find extra cash to plug the hole.
Both parties can help to avoid this! The buyer needs to know the realistic value of the property and keep this in mind when making an offer and the seller needs to be realistic about its value and get several valuations before setting the price.
Sometimes buyers are so keen to secure a property that they do so without having ‘a mortgage agreement in principle’. Both parties need to be confident that the buyer has secured this and that it has not expired (they are usually valid for six months).
2. Getting gazumped
Unfortunately, this is a regular occurrence when the property market is very competitive like it is in the UK right now. Gazumping is when a property seller accepts a high offer from a second buyer- when they have already agreed to sell their property for a slightly lower price to the first buyer.
There are several steps that a buyer can take to protect their position. The first is to make it a condition of their offer that as soon as the offer is accepted, the house is withdrawn from the market. This ensures that other potential buyers do not see it. The second, is that they get to know the seller as it will make it harder for them to accept another offer. They should ensure they have a ‘mortgage agreement in principle’ to give the seller confidence.
3. Problems with a property chain
In an ideal world, selling your home to someone who is a first time buyer or who is not in a property chain of any kind, is preferable, but not always an option. A property chain is a string of transactions that are inter- linked. All it takes is one property sale to collapse and the property chain will as well.
The chain can collapse for a variety of reasons and the secret to success lies with the various estate agents and conveyancers and their ability to keep the momentum going. It is a good idea for house sellers to give theirs a regular chase up to ensure they are keeping things moving.
4. Problems with the home survey
Home surveys are an essential part of the property purchase procedure as they can reveal a myriad of problems with a building ranging from cosmetic details to major structural issues. If the home survey does reveal a major problem, the buyer will want to re-negotiate or else have to withdraw as their mortgage provider has said they they cannot proceed. Either way, it is disastrous for both the seller and buyer
Ideally a house seller should have a survey completed on their house prior to putting it on the market – particularly if it is an old building or they are selling it as a property in need of renovation. Buyers should always pay for the most in-depth survey on the property they are buying as this will prevent any nasty and costly problems further down the line.
5. Delays with the conveyancing
Unnecessary time delays with the conveyancing can lead to seller choosing another buyer who can complete more quickly. This is just one element in the legal procedures that can waste time.
The best safeguard is to ensure that you contact your conveyancer when you start property hunting and again very swiftly once your offer on the property has been agreed.
Certainly the list of reasons why house sales fall through is daunting and so is the fact that 25% of all house sales fail to make it to completion. This is particularly difficult for those who have to sell for a variety of reasons. There is one way to avoid all the anxiety and uncertainty and that is to sell your house to a ‘buy my house for cash‘ company. The sale is swift, with no house viewings, no hold ups and no hidden costs. The biggest advantage is that the house sale is completed quickly and the payment made in cash straight into your bank account – without any broken dreams.
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