Top 5 Reasons a Sale Falls Through
There are many reasons why a buyer might withdraw from a purchase. This is a list of the most common reasons and what can be done to prevent them happening to you:
- Unable to secure financing – Most buyers will need a mortgage in order to fund a purchase. Some may also need to re-mortgage an existing property or liquidate an asset to raise their deposit. Financing can be complicated, and not every buyer does the necessary amount of research into financing a purchase before they start booking viewings and making offers. It is extremely frustrating for a vendor to find out that their buyer can’t afford to proceed with an agreed purchase.
When your Estate Agent puts offer forward to you they should include information about the buyers financing arrangements. If they haven’t, then perhaps they’ve not done enough digging. Before you accept an offer, make sure your agent can answer questions about where the deposit is coming from and what the financing arrangements are.
Outlook works closely with independent Financial Advisors. That means we can ask potential buyers to speak with an advisor about their financing arrangements and get a clearer picture of their ability to complete a property transaction. This saves our vendors time, money and stress from buyers that make offers before doing their sums.
- Repair issues highlighted on survey – A sensible buyer will have some sort of independent survey conducted when purchasing a property. Buyers aren’t necessarily experts on property (especially if they are first time buyers), and survey results can look scary, even if there are no major faults reported. However, it is rare for a buyer to pull out as soon as they see a survey. Usually, if they are worried, they will look for clarification on some issues, will ask if the vendor is prepared to rectify some issues, or will look to renegotiate the price. If your agent mishandles the situation it can cost you money, and you may end up losing a buyer. It’s also important that your agent has negotiated hard to get you the best possible price, as this will soften the blow if you have to reduce the price at all.
These sorts of negotiations can be tricky. Estate Agents are not building surveyors (well, not normally), so they can’t simply contradict the survey findings. However, an experienced agent will have seen many survey reports before, and should be able to bring some perspective to negotiations. There are many factors that need to be considered: Could the buyer reasonably have been expected to have allowed for the cost of the repairs before making an offer? Are repairs likely to be expensive, or does the agent know a reputable contractor who could carry the work out for a reasonable price? Are other buyers likely to be worried by the same issues, or is it just these particular buyers?
It also helps if you have employed a local agent. An in-depth knowledge of the local housing stock can be invaluable when trying to resolve survey issues, and being on hand to meet buyers, surveyors and contractors at the property also helps a great deal.
Outlook has an excellent record of hiring and retaining experienced staff. Whenever possible we like to hire staff who are from the local area, or have a long experience of working there.
- Legal work taking too long – Buying a property is a big commitment, so it’s understandable that buyers want their solicitor to have all the information they need before exchanging contracts. Some vendors don’t realise that a buyer’s solicitor is likely to be representing the mortgage lender, too. That means that even if the buyer is happy, the solicitor won’t allow exchange to happen until the lender has the information that they consider important.
Slow progress and poor communication is a common cause for complaint and of stress during a property transaction. Therefore, it is vital that the vendor chooses carefully when selecting a solicitor. If you’ve used a solicitor before and received a good service, then stick with them! If not, then ask your agent to recommend one. Try not to make your decision on price only; there are other important things to consider:
a) If your property or locality has idiosyncrasies that a local person is more likely to understand, then appoint a local solicitor.
b) Look for a solicitor that specialises in conveyancing, otherwise you may find they’re in court or dealing with other matters when you need them.
c) Make sure you are dealing with a qualified solicitor of experienced conveyancer. Sometimes the cheapest prices come from firms where you will be dealing with a relatively inexperienced member of staff who will have to refer and complex issues to someone else in the firm who is more qualified.
Outlook work with a number of solicitors who we have had good previous experiences with. We know the value of strong communication during a sale, so we only recommend solicitors who we have forged successful working relationships with over a number of years, and this has helped us keep the number of aborted transactions to a minimum.
- Chain collapses – Chains (linked property sales) are a necessary feature of the market. A long chain can increase the risk of a sale falling though, so some vendors try to avoid being in a one. Unfortunately, that’s not always possible, especially if you are selling a property at the high end of the local market which a first-time buyer or investor is unlikely to purchase. When considering an offer it is important you have detailed information about the chain. If your agent can’t tell you the extent of the chain and the position of all the buyers and sellers involved then you shouldn’t accept.
At Outlook we pride ourselves in attention to detail and doing things the correct way. That means we’ll always check every part of the chain before we put an offer forward, and our specialised software will help us to detail the chain and keep in touch with all the other agents and solicitors involved.
- Property is un-mortgageable – There are a number of reasons that a property might prove un-mortgageable or very difficult to raise finance against: disrepair, construction type, high-rise building, defective lease, undesirable location, above commercial premises, Japanese Knotweed nearby. Whatever the reason, it may mean your buyer has to pull out. If this happens, and you are unable to rectify the situation, then you will need to find a cash buyer. Beware: a cash buyer will usually expect a below market price, and you need to ensure you get the best price you can in the circumstances.
Outlook have excellent connections with property investors on a local and national level. If you need an experienced investor who can make a quick cash purchase on a difficult to mortgage property, there’s a good chance we’ll have the right buyer for you.