What to do if your house purchase falls through

Why do house sales fall through? 

There are lots of reasons why house sales fall through. Sometimes it’s as simple as a buyer getting cold feet or changing their mind. Maybe they’ve found a more suitable property elsewhere, they’ve decided to stay where they are, move to a different area or they’ve tried to negotiate a better offer only for their request to get rejected. 

Home sales can also fall through if a seller pulls out of a sale and offers the property to a different buyer - also known as gazumping. There are lots of reasons this might happen, from the original buyer struggling to get a mortgage or sell their own home on time to the new buyer offering to pay more for the property.

Buyers might have their heart set on a particular home only to change their mind after reading their surveyor’s assessment. This is most likely to happen if the survey uncovers underlying issues that buyers weren’t expecting - particularly if the issues will be expensive to fix and could affect the property’s value. If you’re the one selling the property, you may be able to save the sale by reducing the price or offering to pay for the changes yourself.

You might also like: How to negotiate on house price

If a buyer is unable to get a mortgage for the property, the sale may fall through - even if they have a Mortgage in Principle that says they can afford the property. A Mortgage in Principle plays an important role in the home buying process as it gives buyers a good indication how much they can afford to borrow, but they’re not legally binding. There are lots of reasons why a lender can reject the borrower’s application at a later date, such as a change in the buyer’s income, credit rating or amount of outstanding debt. 

Learn more: What can I do if my mortgage application is denied?

Likewise, if a mortgage lender is unhappy with the results of a property valuation, they may offer a lower mortgage than necessary or refuse to lend on the property at all. Buyers may be able to get a mortgage through a different lender, even on short notice, but it’s important to act fast to avoid missing out. 

One of the most frustrating things about buying and selling houses is that you (and the people you’re buying from or selling to) can do everything right, only for issues further along ‘the chain’ to grind the sale to a halt. If the buyer needs to sell their own property before they can buy yours, you’ll be relying on their buyer and maybe even their buyer’s buyer too. The same is true for the person who’s selling their property to you. It’s a frustrating process and things can go wrong that aren’t within your control.

What can you do if your house purchase falls through? 

If your house purchase falls through, this doesn’t need to be the end of the road. If you need to sell a property to pay for your new one, ‘breaking the chain’ could save you time, stress and heartbreak. You can do this by splitting the process into two separate parts and selling your home before you make an offer on a new one. This will make you a ‘chain-free’ buyer/seller, which could give you a competitive edge over others. Buyers tend to prefer chain-free sellers and sellers tend to prefer chain-free buyers (including first-time buyers) because there’s a smaller chance of things going wrong. 

If you’ve made an offer on a property, you can also reduce the chances of having the rug snatched from under you by asking the seller to take it off the market as soon as they accept it. That way, you won’t have to worry about other buyers swooping in and offering the seller more money. 

If you’re selling a property, your estate agent can ask potential buyers to provide proof of income and deposit before you consider their offers. Buyers aren’t legally required to provide this information, but there’s nothing wrong with requesting this to make sure they can afford the property