A warning that three in 10 property purchases fall through
New research from Which Mortgage Advisers revealing that 28% of homebuyers have had a house purchase fall through after their offer was accepted must count as a warning sign for anyone buying a home or hoping to very soon.
For those on a limited budget, the thought that the associated expenses of buying a home might go to waste is a great concern – you can only spend your money once, after all. On average, the homebuyers surveyed, whose home purchases were scuppered, were left nearly £3,000 out of pocket as a result.
The survey looked at some 2,000 homebuyers who had purchased their home over the past couple of years. It showed an average 4.5 months for the buying process to reach the point where an offer is accepted.
There were four main reasons why nearly three out of ten found their purchase falling through:
- The seller decided not to sell their home after all (27%)
- The buyer pulled out, as their own property sale had fallen through (21%)
- The buyer found somewhere else to buy (21%)
- The buyer was ‘gazumped’ (21%)
Other reasons included one or other party pulling out due to the length of the process, a change of heart from the buyer about the property they intended to buy and a falling out between the two parties.
The average loss of £2,899 for those whose purchase was called off was spent on things such as conveyancing costs, survey fees, mortgage valuation charges or brokerage fees, paid for but not able to be recovered.
Many homebuyers saw their transactions fail due to problems in the property chain, with a high risk from the line of buyers and sellers linked together simultaneously selling and buying a property from another.
Many buyers of new build homes choose to do so because it eliminates the chain going forward, and some then opt to buy through a Part Exchange deal if it is offered as that then avoids the chain in the other direction.
David Blake at Which? Mortgage Advisers, says: “No one wants to see their dream property slip through their fingers, particularly if it leaves you out of pocket, but there are steps you can take to ensure you are in the best possible position.
“The best way to protect yourself from your purchase falling through is to avoid a lengthy chain. With the right preparation and research, including getting your finances in order prior to making an offer, you can avoid complicated chains and improve your chances of success.”
The Which? mortgages team also recommends a few steps to take to minimise your chances of being caught in an expensive dead-end:
- Consider selling your property and moving into short-term rented accommodation, or alternatively with family or friends. From this position, you become a chain-free cash buyer, which will make you a more appealing buyer and could be used to your advantage with a keen vendor.
- If you can afford to be picky, look to buy a property where the upward chain is short or, even better, non-existent. Does the vendor own another property, for example, and not need to find somewhere else to live.
- New-build homes have no upward chains and a Part Exchange offer from the developer will also help speed things up (and you’ll be able to coordinate your selling and moving dates precisely).
- 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. They may be keen to adhere to the first point above.
Find out more at www.which.co.uk