According to a new study commissioned by ProperPR on behalf of home buying firm HBB Solutions, when it comes to sales falling through, buyers’ issues, most of the time, are the cause.
25% of agents surveyed have seen at least 10% of sales falling through during the past year. 44% of agents have said less than 5% of their sales fell through.
And 26% said the issue affected between 5% and 9% of their house sales. 25% of the agents have seen between 10% and 29% of their transactions fall through in the past year.
And the majority of agents said that the buyers were to blame.
Why Are Sales Falling Through?
While there are many reasons why sales fall through, 46% of the agents surveyed have stated that issues with the buyer were to blame. 22% said that buyers higher up in the chain were responsible for the sale falling through.
But it’s not always the buyer’s fault. 17% of agents identified solicitors and conveyancers as the culprits.
A sale that falls through can cause a lot of stress for sellers, which is why it is important to not just go with the highest offer, but with the strongest buyer.
In fact, it’s often the buyer that is to blame and so it highlights the importance of opting for a buyer in a strong position, rather than the one placing the biggest offer on the table.Chris Hodgkinson, Managing Director at HBB Solutions
Issues that can occur on the buyer’s side include:
- buyer is unable to get the mortgage for the amount needed
- the property gets down valued by the mortgage company and buyer is not able to make up the difference
- buyer decides at the last minute they want to pay a lower price
- buyer changes their mind or there is a change of circumstances
- survey has showed up issues the buyer is not willing to accept
Other reasons why a sale could fall through:
- seller accepts a higher offer from a different buyer – this is called gazumping
- delays in the conveyancing process, for example searches taking too long
- solicitors being slow
- sellers circumstances change
- somewhere else in the chain issues occur
According to the survey, the biggest issue that arises from sales falling through is the time wasted on processing the sale, with 41% of agents identifying this as the main issue. 34% have named wasted financial resources as the main issue.
What To Do To Prevent Your Sale From Falling Through?
With buyers most likely to be the reason for a sale falling through, sellers should make sure their buyer is serious and can afford the property. Evidence as to finance being in place should be requested from the buyer before accepting an offer.
To avoid the property being valued down by the mortgage company, sellers should get valuations from several estate agents to ensure their sales price is realistic.
While breaks in the chain are difficult to avoid, sellers should consider carefully an offer from a buyer in a long chain. If there are several offers, a ‘chain free’ buyer might be preferable.
To avoid sales falling through because of bad surveys, sellers could commission their own survey before putting the house on the market. And then make any repairs that are likely to put off a potential buyer.
Buyers should make sure that the seller knows they are serious, as this will reduce the risk of gazumping, where the seller accepts a higher offer from a new buyer after having accepted an offer.
Buyers have to ensure they are ready to proceed when they make an offer. This means they have had an offer accepted on their house, they have a mortgage in place in principle or can provide proof of funds if they are cash buyers.
While sometimes the conveyancing process can be slow for reasons outside the solicitor’s or seller’s control, by instructing a conveyancer as soon as the house is on the market, sellers can get ahead and avoid delays.
Equally, buyers should instruct a solicitor as soon as they are ready to make offers. This will speed up the process and prevent delays.
In the current fast market, with demand outstripping supply, finding a new buyer might not be difficult. But as the market slows down, and there are signs this is happening now, losing your buyer could become an issue.
When a new buyer is to be had within a few days, losing a buyer doesn’t sound such a big problem.
However, the latest data from OnTheMarket shows that in the first four months of 2022, there was a 19.2% increase in the number of new properties coming on the market.
This means that supply is likely to catch up with demand soon, especially as the cost of living crisis and rising mortgage rates are making it more difficult for many potential buyers to afford to buy a house.
So it is vital for sellers that they try to avoid sales falling through by following the recommendations we have outlined above.