One of the unfortunate risks that homeowners face when selling is the buyer pulling out of the sale before any money is exchanged or a contract is signed. There can be a variety of reasons behind a buyer backing out all of a sudden, but it doesn’t come without a cost to the seller.
The selling process in England and Wales can be more stressful than in Scotland or other countries around the world because there are no rules in place preventing one of the parties easily pulling out of the sale without any repercussions.
A buyer backing out at any time in the sale will likely cost the seller a few thousand pounds on things like survey costs and solicitor fees. Not to mention, it could be stressful if another property has been lined up for an onwards purchase and they are expecting money from the sale of their own property.
However, there’s a way that the seller can protect themselves from limiting any repercussions if the buyer decides to pull out. For starters, charging a deposit fee when the offer is made could easily curb this problem. This would allow for both parties to have skin in the game, which makes them both responsible for the sale going smoothly.
The requirement of a deposit would also be helpful in eliminating gazundering – a practice where the buyer lowers the price of the sale just before completing, forcing the homeowner to either let the sale collapse or take a lower price.
Although it often seems as though the seller is more at risk than the buyer, a deposit would also protect the buyer in case the seller decides to back out of the sale because the seller would be breaking the agreement, and not surprisingly, the deposit would be returned in full.
The best way to ensure that the agreement for the sale is held up is for a required deposit following the offer being accepted, and while it isn’t common practice, don’t be afraid to ask your agent to put one in place.
In the event that there is no contract or deposit in place, a sale falling through only adds more time and more money to the property sale.