A recent survey of homebuyers has revealed that nearly a third saw their purchase collapse after their offer was accepted.
When Which? surveyed 2,000 recent homebuyers in February 2016, 28% said they’d had an offer accepted on a property only for the purchase to fall through.
In 27% of cases, this was down to the seller having a change of heart about selling their home.
Chains and gazumping
Our research also found property chains to be a problem, with one in five failed deals (21%) being caused by buyers unable to complete sales on their own homes.
Other reasons included buyers finding somewhere else to buy (21%) and people being ‘gazumped’ – losing the property due to the vendor accepting a higher offer from another buyer (21%).
Find out more: minimise your chances of this happening to you with our guide to gazumping
The cost of transactions collapsing
While 16% of buyers managed not to lose money at all, others found themselves substantially out of pocket due to unrecovered conveyancing, survey, mortgage valuation and brokerage costs.
Of those who had lost money and knew how much they were out of pocket, the average amount lost was £2,899 – with 5% of respondents losing over £5,000.
- Avoid losing money on legal costs by choosing a no-move, no-fee service like Which? Conveyancing
|Reasons for house purchases falling through|
|Reason||% of those who experienced a failed transaction|
|The seller pulled out – they decided not to sell their home after all||27%|
|I (buyer) pulled out – my own property sale had fallen through||21%|
|I (buyer) pulled out – I found somewhere else to buy||21%|
|The seller pulled out – someone else made a higher offer (I was gazumped)||21%|
|I (buyer) pulled out – I decided I didn’t like the property enough to buy it after all||15%|
|The seller pulled out – the process took too long||13%|
|We (buyer and seller) had a disagreement and couldn’t find a resolution, so the transaction collapsed||4%|
Five tips for avoiding property chains
David Blake at Which? Mortgage Advisers said: ‘No one wants to see their dream property slip through their fingers – and there are steps you can take to ensure you are in the best possible position.’
As our tips below show, the right preparation and a little strategy can help you avoid being stuck in an unmanageable chain, which can in turn reduce the likelihood of your transaction collapsing.
Look for a seller who isn’t in a chain
If you’re buying and can afford to be picky, look for properties where the upward chain is short or, even better, non-existent – for example, if the previous owner has died and the property is empty, or the vendors owned it as a second home and don’t need to find somewhere else to live.
Choose a buyer who isn’t in a chain themselves
If you’re selling and have multiple offers on the table, choose a buyer who isn’t in a chain themselves, such as a first-time buyer.
Consider temporary rental accommodation
It’s worth considering selling your property and moving into short-term rented accommodation or with family or friends. You’ll then be chain-free, which you can use to your advantage when making an offer as you’ll be much more appealing to the vendor. Bear in mind though that it is a risky strategy as there’s no way of knowing how quickly you’ll find somewhere to buy.
New-build homes can be quicker to buy
New-build homes have no upward chains for obvious reasons – and if you’ve got a property to sell, the developer may offer part-exchange, meaning they’ll buy your old property to help speed things up. However, you may not always get the best price for your property this way.
Agree deadlines with vendors
If you’re in a hurry, try and get the vendor of the property you’re buying to agree to a date by which they are prepared to move out, whether they’ve bought somewhere themselves or not. Vendors will sometimes agree to move into rented accommodation to avoid risking the deal falling through.
Find out more: get the full lowdown on managing a property chain