House Sale Fell Through Last Minute, What Should I Do Now?
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Selling your home can be a frustrating and unpredictable process, with many variables that can either slow things down or, in the worst-case scenario, take you back to square one.
In the UK, between 2018 and 2023, an average of 30.5% of house sales fell through. This statistic can be disheartening for anyone thinking of buying a new home or selling their current property, highlighting just how often property transactions encounter hurdles.
In this article, we’ll explore what steps to take if your buyer pulls out, the best options for a successful sale, and how you can keep your house sale moving forward smoothly.
What should you do if your house sale falls through at the last minute?
Having a house sale fall through at the last minute can be frustrating, but it's important to take immediate steps to regain control of the situation, as it will cost you more if you do nothing. Here’s what you can do if your buyer has pulled out:
1. Learn why the sale fell through
The first thing you need to do is determine the cause of the failed sale. Whether it was due to buyer financing issues, a failed survey or legal complications related to the property, knowing the reason will help you plan your next move more effectively.
If the sale fell through because of something discovered during the survey, take the opportunity to fix any major problems before relisting or selling your property. This could make your home more appealing and improve your chances of closing the deal with the next buyer.
2. Speak to your estate agent
Your estate can provide insights into why the sale failed and offer strategies for re-listing your property. They may also have a list of other potential buyers or marketing tactics to quickly find new prospects.
With the help of your estate agent, reach out to other potential buyers who have shown interest in your home before. They may still be looking, and you could secure a new offer more quickly than starting from scratch.
3. Reassess your asking price
If your house has been on the market for a while, it may be worth re-evaluating your asking price. A price adjustment could attract more serious buyers and prevent the sale from stalling in the future.
While lowering your asking price may attract more buyers, it’s important to proceed with caution. If the sale falls through again and you decide to sell to a cash buyer, they are likely to base their offer on the most recent listed price, not the original asking price.
This means you could end up accepting a price that’s 10% to 20% lower than what you initially expected, potentially reducing your overall return on the property. Which is why, you may want to consider a cash buyer as soon as your house sale falls through.
4. Explore selling to a cash buyer
If you’re looking for a faster, more secure sale, consider working with a cash buyer. Cash buyers are often able to close deals much quicker since they don’t rely on mortgage approvals or other financing, which can minimise the risk of the sale falling through again.
Cash buyers can be especially helpful if you’re in a chain. This is because selling to a cash buyer ensures the chain keeps moving forward, even if you’re taking a lower price to keep up the momentum.
Is it common for house sales to fall through?
It has long been said that over one third of all open market house sales fall through, with recent figures showing that 31.2% of sales fail due to a chain breaking. This can be a significant source of frustration for slides, especially those in a chain dependent sale.
However, there is a disconnect between the open market and other methods of selling. While a large portion of open market sales may fall through, most properties do end up being sold, albeit through alternative channels.
In a recent study of our own database, we found that only 2.4% of homeowners who sold their home to us between January 1st, 2024, and September 1st, 2024, cited a chain break as the reason for using our service.
This discrepancy may be due to the fact that many homeowners whose sales fall through may need a quick cash release to move forward with their plans. As a result, they may choose to emphasise the need for fast access to funds as their primary reason for opting for a direct sale, rather than the broken chain itself.
Why do buyers pull out at the last minute?
Since property transactions in a chain are interconnected, any issue with one party can lead to delays or even collapse the entire process. Being part of a chain can slow things down and add to the complexity of buying and selling a house. Here are some of the most common reasons why buyers pull out at the last minute:
Change of heart:
Sometimes, buyers or sellers simply have a change of mind, deciding not to proceed with the sale for personal reasons.
Unexpected life events:
Family issues, illnesses or job redundancies can arise unexpectedly, forcing buyers or sellers to pull out due to changed circumstances or financial instability.
Financing issues:
A buyer may fail to secure a mortgage or necessary financing at the last moment, making it impossible for them to move forward with the purchase.
Problems revealed in their survey:
If a survey uncovers serious issues, such as structural defects, buyers may withdraw their offer, particularly if the cost of repairs is too high or if the property’s condition is worse than expected.
Gazumping:
A seller may accept a higher offer from a new buyer, leaving the original buyer in the lurch. This practice, known as gazumping, is frustratingly common in competitive markets.
Gazundering:
Conversely, a buyer may reduce their offer at the last minute, often after finding faults during the survey or due to changing market conditions. If the seller refuses the lower offer, the sale may fall through.
What is the most common reason for property sales to fall through?
The most common reason house sales fall through is due to a change in the buyer’s circumstances or a shift in their personal situation. This could be driven by a variety of factors, such as financial difficulties, the breakdown of a relationship, or simply the buyer having second thoughts after reflecting on the decision – often referred to as “cold fee.”
For many buyers, buying a home represents the largest financial commitment they will ever make, which can be overwhelming. If the buyer begins to feel uncertain, or they encounter unexpected life events, they may decide to pull out of the deal, even at the last minute.
Financing issues are also a frequent cause. Buyers may face problems securing the necessary mortgage, especially if their financial situation changes, such as losing a job or if the property is undervalued in the mortgage lender’s survey.
Similarly, complications during the legal process, such as unresolved issues in the property’s title, can lead to delays that cause frustration and ultimately lead to the sale falling through.
Other common reasons include complications within the property chain, where a dependent sale falls apart, leaving the buyer unable to proceed, or the survey results revealing unexpected problems with the property that deter the buyer.
In these cases, transparency, and open communication between all parties involved can help mitigate the chances of a sale collapsing, but it's important to remember that not all scenarios are within anyone’s control.
Do you get compensation if a house sale falls through?
In general, if a house sale falls through before the exchange of contracts, neither the buyer nor the seller is entitled to compensation. Up until the point of exchange, the sale is only “subject to contract,” meaning that either party can withdraw without financial penalty, though both may still incur their own legal and administrative costs.
However, once contracts have been exchanged, the sale becomes legally binding. If the buyer pulls out after this point, they are in breach of contract, and the seller can seek compensation. In most cases, the buyer forfeits their deposit, which is usually 10% of the purchase price. This deposit compensates the seller for the inconvenience and potential financial losses caused by the failed transaction.
Beyond forfeiting the deposit, the seller may also be entitled to claim damages for any additional costs they incur due to the breach. For example, the seller can demand interest at the “contract rate,” which is often set a few percentage points above the Bank of England base rate. This interest compensates the seller for the delay and any financial burden caused by the buyer’s failure to complete the transaction on time.
If the buyer does not complete within the agreed time frame after exchanging contracts — commonly two weeks, the seller may terminate the contract. At this point, the seller has the right to keep the deposit and can also pursue further damages if their financial losses exceed the amount of the deposit.
Steps to avoid another house sale from falling through
Even when your house sale seems to be progressing well, there is always a risk that the sale could fall through. To minimise the risk, there are some proactive steps you can take:
1. Set a realistic asking price
One of the most important factors in preventing a sale from collapsing is setting a realistic asking price. Overpricing your home can lead to drawn out negotiations, fewer offers, and ultimately, a higher likelihood of the buyer backing out, especially if their mortgage lender values the property lower than expected.
On the other hand, underpricing may cause you to lose out financially or attract less serious buyers. It’s important to consult with a local estate agent and consider market trends to strike the right balance between getting the most out of your property and attracting the right buyers.
2. Be prepared to move quickly
Time is an important factor in the success of a house transaction. The longer it takes to reach the exchange of contracts, the greater the chances of complications, such as the buyer getting cold feet or encountering financing issues, to speed up the process:
Ensure all your paperwork is ready before listing the property, such as property Title Deeds, Energy Performance Certificates, and any relevant warranties.
Instruct a solicitor or conveyancer early on to ensure they are ready to act quickly.
Respond promptly to inquiries from the buyer’s solicitor and make sure to schedule surveys and inspections without delay. The sooner you can exchange contracts, the less likely the sale is to fall apart.
3. Keep backup buyers interested
Even if you have an offer in hand, it’s smart to keep other potential buyers engaged in case the sale falls through. You can do this by maintaining contact with interested parties, especially if they previously viewed the property or expressed interest. This way, you have a backup plan in place and won’t lose too much time if your current buyer pulls out.
One particularly useful strategy is to have a cash buyer lined up, such a professional property buying company. Cash buyers are often in a position to complete transactions more quickly since they don’t rely on mortgage approval or financing, reducing the risk of delays.
Having a cash buyer as a fallback option can help ensure that your sale proceeds smoothly even if your first buyer backs out.
4. Consider a chain-free sale
Property chains can be a significant cause of delays and collapsed sales. If your buyer is reliant on selling their own home, the sale could fall apart if the buyer drops out or experiences delays.
To avoid this, consider targeting chain-free buyers, such as first time buyers or cash buyers, who are not dependent on other transactions. This can significantly reduce the risk of a sale falling through.
House sale fell through FAQs
My house sale fell through before exchange of contracts, what do I do?
If your house sale fell through before the exchange of contracts, whether you decided to withdraw or the buyer pulled out, then the first step is to understand the reason behind it. Identifying the cause allows you to address any issues and improve your chances of a successful sale in the future.
Understanding why the sale fell through is essential — was it due to an issue raised in the buyer’s survey, or did the buyer fail to secure mortgage approval?
If the reason was something within your control, such as repairs or concerns about the property's condition, it’s worth taking the time to resolve these issues before putting your home back on the market, for example:
If the buyer’s survey revealed problems, like structural issues or dampness, consider making repairs or adjusting your asking price to reflect the property’s true condition.
If the buyer struggled with mortgage approval, it may be helpful to reassess your pricing or target cash buyers who aren’t dependent on financing.
If the buyer withdrew or reduced their offer without a clear reason, it’s understandable to feel frustrated and disappointed. However, these situations aren’t uncommon in the housing market.
Sometimes, buyers get cold feet or overestimate their ability to secure financing, which is beyond your control. The good news is that you’re still in a strong position to relist your home. In fact, you can often find a new buyer quickly, especially in a strong market.
How many house sales fall through before exchange?
The majority of house sales that collapse do so before the exchange of contracts. In fact, approximately one third of all house sales fall through before reaching completion.
This is largely because, until contracts are exchanged, neither party is legally bound to proceed, making it relatively easy for buyers (and sometimes sellers) to withdraw without facing significant legal or financial penalties.
My house sale fell through after exchange, what do I do?
If your house sale fell through after the exchange of contracts, the situation is more serious than if it happened before. After contracts are exchanged, both parties are legally committed to the sale. If the buyer pulls out, they are in breach of contract and you are entitled to take legal action.
If you need a new buyer, consider selling to The Property Buying Company, and we can keep your house sale progressing.
Is it common for house sales to fall through after exchange?
It’s relatively rare for house sales to fall through after the exchange of contracts. At this stage, both the buyer and seller are legally bound to complete the transaction, and the financial penalties for pulling out are severe. Most sales that collapse happen before the exchange, when neither party is legally obligated to proceed.
However, in the few cases where sales do fall through after exchange, it’s usually due to exceptional circumstance, such as:
Buyer’s inability to complete: The buyer may face an unexpected financial crisis, such as job loss or a failed mortgage, making it impossible for them to complete the purchase.
Personal emergencies: Serious personal events, such as a death or illness, might cause a buyer to withdraw despite the financial consequences.
Seller breach: Occasionally, the seller may breach contract terms (e.g. not vacating the property on time or failing to address agreed repairs), which could lead to the buyer pulling out.
My house sale has fallen through 3 times, what next?
If your house sale has fallen through multiple times, it’s understandable to feel frustrated and uncertain about the next steps. At this point, it may be time to consider a faster and more secure solution — selling to us at The Property Buying Company.
We specialise in buying houses quickly, and we can complete your house sale in as little as 7 days. By choosing us, you can avoid the uncertainty and delays that come with traditional sales and we’ll even cover your legal fees to make the process as smooth as possible.
With us, you can rest assured that your sale will move forward without the risk of falling through again.
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