Sellers can expect to pay an average of £1,315 if a buyer decides to back out of the transaction. On the other hand, buyers typically face solicitor fees of around £1,655 when a seller pulls out.
When buying or selling a property, there are various solicitor fees to be paid, such as legal fees, searches and disbursements. Generally, the further along you are in the process, the more you will likely need to pay.
How can you keep your fees to a minimum when selling a house? Have you heard of the contract race?
In this guide, we’ll be looking at the solicitor fees you can expect to pay when either a buyer or a seller pulls out of a house sale.
Table of Contents
Do Solicitors Charge If A Sale Falls Through?
Solicitor costs depend on how far along the sale of a property is. The further along the process, the more you are likely to have to pay.
If your solicitor offers a ‘No Sale No Fee’ guarantee, your legal fees should be recoverable, although any conveyancing disbursements won’t be refunded.
Before the Exchange of Contracts
Either party can end the transaction before the exchange of contracts without any legal consequences. Depending on the stage of the process, you may be able to ask the other party to cover your fees, although it is unlikely since both parties are responsible for their own fees.
It’s important to review the agreements you’ve signed with your estate agent. There may be clauses that prohibit you from withdrawing without incurring penalties, such as paying the agent’s fee.
The contracts with your solicitor should be checked, too, in case you need to pay any outstanding fees.
Before Completion
If contracts have been exchanged, this can create problems if the sale does not go through before completion day. Both parties are legally obligated to the transaction when the exchange of contracts has taken place.
If either party decides to withdraw from the agreement, they may incur financial penalties. This is due to it being seen as a breach of contract.
If a buyer chooses to back out of the sale before completion, the seller is entitled to keep the deposit. The seller can sue for any extra costs, such as legal fees and disbursements, especially if it affects the value of the property. However, in reality, you’d be throwing good money after bad, as the only winner will be the litigation solicitors charging you £300 an hour.
Should the seller withdraw from the sale, they must pay the buyer their deposit with interest. The buyer can ask that the seller cover their legal fees and disbursements.
Why Do Buyers Pull Out?
If a buyer has withdrawn from the transaction, this can cause a lot of issues, particularly if you have a property to purchase.
If this is the case for you, consider why the buyer has withdrawn. Doing so can help to ensure that you don’t face a similar situation in the future. Here are a few of the most common reasons that buyers pull out:
Change of Heart
Buyers can sometimes change their minds about a property. This can be due to market forces, or they may find another property that better fits their needs. To ensure the sale goes smoothly, it’s essential to have a swift conveyancing process with minimal delays.
This prevents buyers from getting discouraged and helps the sale progress.
Gazumping
Gazumping occurs when a seller accepts another offer from a second buyer after accepting the initial offer from their first buyer – often if the second buyer offers a higher amount. This provides the seller with an opportunity to raise the house price and hope the first buyer will outbid the second.
However, this can be off-putting to buyers, and they can then decide to pull out of the transaction.
Gazumping is a huge issue, especially for those in a property chain. Buyers in such a situation can feel enormous pressure to increase their offer should they be gazumped. They should have alternative properties as a backup plan in case this happens.
Negative Survey Results
Lastly, gazundering can occur due to negative survey results. The survey report is a key part of the process, as it will identify any problems or issues with the property. It’s possible to find issues in the survey that you weren’t aware of before.
Most survey reports come with advice for maintenance and cost estimations. The issues may not faze some buyers, and they could use it as an opportunity to renegotiate their offer.
On the other hand, some buyers may not want to take on the problems and choose to withdraw from the transaction.
Solicitor Fees When a Buyer Pulls Out
If a buyer withdraws from a transaction, they should expect to pay an average of £1,655 for freehold properties or £1,825 for leasehold properties. It’s also important to remember that they have to pay for the property survey to be conducted.
Here is a breakdown of the solicitor fees that a buyer can expect to pay before the exchange of contracts. These costs are based on the £277,000 national average house price:
Solicitor Legal Fees – £1,320 for freehold/£1,490 for leasehold
The majority of your conveyancing fees will comprise your solicitor’s legal fees. Generally, this cost is lower for freeholds since leaseholds involve more paperwork. If your solicitor has a ‘No Sale No Fee’ guarantee, you may be able to recoup these expenses.
Conveyancing Searches – £290
The buyer needs to cover the cost of the conveyancing searches. These searches will highlight environmental issues that might impact the property and its surroundings.
Bank Transfer Fee – £40
The fee for bank transfers is applied to transfers over £60,000. It is a common occurrence for banks to quote their transfer fees without including VAT. Therefore, it’s always a good idea to confirm whether the transfer fee does or does not include VAT.
Anti-money Laundering Checks – £5
The anti-money laundering check is done when the buyer is paying in cash or through multiple accounts. It ensures that the funds are legitimate.
What Should I Do if My Buyer Pulls Out?
If your buyer backs out of the deal, there are measures you can take. It’s vital to be prepared if your buyer does withdraw, particularly if it is before contracts are exchanged.
- Don’t be hasty when it comes to the sale. Many sellers feel the financial pressure and reduce their asking price. However, you can keep your asking price and trust that another buyer will come along. Be patient. It can take up to 6 months to sell a house.
- You can ask for proof of finance early on in the process. This could include bank statements and a mortgage agreement in principle. You can ask for a non-refundable deposit from potential buyers to ensure they are serious about the sale.
- Carrying out your survey is also a good idea. If the buyer withdraws due to negative survey results, you can have your survey done to detect any issues. You can then either fix the issues or lower your asking price accordingly.
Sell To Us!
We’d love to buy your property, whatever the condition. We’ll pay £1,500 towards your legal fees, and we are committed buyers.
Here’s why you should consider us:
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.
