Can a buyer pull out of a sale? With one in three sales collapsing if you need to sell and there’s a delay, uncertainty creeps in.
The initial acceptance of an offer is the first step in a property transaction. The best-case scenario for both buyers and sellers is if the process runs smoothly and contracts are exchanged without any issues.
But, after the offer is accepted, anything can happen. Unforeseen circumstances, such as bereavement, legal issues, employment changes and financial hardship, can make the transaction difficult or even impossible.
So, is an accepted offer legally binding? When can a person pull out of a house sale?
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Buyers: Can You Withdraw an Offer on a House?
It is perfectly acceptable for buyers to withdraw their offer at any point before contracts are exchanged. No explanation is needed.
Sellers have a right to know what caused the buyer to back out so they can make any necessary changes before attempting to sell again.
Making an offer should not be seen as a way to “hold on” to a house while deciding. For the seller’s sake, it is best to be certain that you want to buy the property and that it is affordable before putting forward an offer.
If any issues arise, such as the estate agent refusing follow-on viewing, for example, to show a builder, then the buyer should communicate these concerns to their solicitor, who will then inform the seller. Withdrawing your offer without warning can cause major problems for the seller.
At What Point Can You Pull Out of a House Sale?
The answer is the same for both buyers and sellers: when it comes to exiting a sale, the exchange of contracts or “settlement” marks the point of no return. The matter is clear and inflexible.
Can you pull out of a house sale before the exchange of contracts? Yes.
Can you pull out of a house sale after an exchange of contracts? No.
Exchanging contracts represents a legally binding agreement, and afterwards, you must adhere to the terms of the contract.
Remember, even if you regret buying the property, you are obliged to complete the transaction. Failing to do so could cause you to lose at least a 10% deposit, as well as incur legal fees and other charges such as surveys.
If you pull out before the exchange of contracts, you may still be liable for “abortive fees.”
Why has my buyer pulled out of the sale?
Buyers may withdraw from a property transaction for a variety of reasons.
- One such reason is the inability to secure a mortgage. Even if they have secured an agreement in principle prior to making an offer on the property, certain circumstances may arise which prevent them from obtaining a mortgage.
- Issues identified in a property survey can also cause buyers to become nervous about proceeding with the purchase. Common problems identified during a survey include: damp, structural movement, asbestos, roof issues, alterations made without building regulations or planning permission, and concerns about the electrical safety.
- If the survey reveals any issues or the buyer believes the property is worth less than the original offer, they may try to renegotiate the price. If the seller is unwilling to reduce it to a level the buyer is happy with; they may choose to withdraw from the sale.
- The complexity of the transaction can also be increased if it is part of a chain. Long chains are more prone to collapse and can prolong the house-buying process, which may deter the buyer from completing the sale.
- Buyers may simply change their mind about a property after having their offer accepted. For example, they have fallen in love with another property, such as a new build home.
Can a Seller Pull out of a House Sale?
Again, a seller is within their rights to change their mind about selling a property up to a certain point. Reasons for this could be that they have had a change of heart and want to stay, believe that their property was under-priced, received a higher offer, or their sale of a new home has fallen through.
It is polite to let your buyer know as soon as it looks likely that you will have to cancel the sale. They may be in the middle of selling a property themselves, and backing out at the last minute could leave them without a place to live.
So, how late can a seller or buyer pull out of a house sale?
What About Auction?
Property auctions are quite different. For buyers, it is possible to cancel a bid during an auction. However, if your bid is the highest, you cannot back out once the bidding is over.
The winning bid is a legally binding contract and must be honoured by both buyer and seller. When a property has been declared “sold”, the contract is final.
However, the above rule doesn’t apply to the Modern Method of Auction, where the sale is conditional and contracts aren’t exchanged. The buyer risks losing their buyers’ premium and can renegotiate the price should adverse or undisclosed information come to light.
Take extra care when making or accepting an offer to avoid any unnecessary issues. The more certain you are, and the lower the risk involved, the smoother the sale will be.
Sell With Us!
If you’re buying or selling a property through an estate agent, you can pull out of the transaction at any time before the contracts are exchanged.
If it’s an auction, you can’t back out once your bid is officially declared the winning bid or when a final bid has been accepted on your behalf as the seller. However, if you sell at auction, there’s a real risk of you underselling your property.
Property Saviour makes it easier for you to sell your home without the worry of your buyer dropping out at the last minute. We can provide a no-obligation cash offer up front, and you won’t need to wait weeks for contracts to be exchanged.
Plus, with us, you can complete the sale in as little as seven days, and there are no estate agents or legal fees to pay.
For more information about our services, get in touch with Property Saviour today. We’re here to help you in any way we can.
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
- 100% Discretion guaranteed.
- If you have another buyer, you can put us in a contracts race to see who completes first.
- Complete in 10 days or at a timescale that works for you. You are in control.