The number of property sales that fall through before exchange has increased dramatically
New figures show that in some areas of the UK 40% of property sales fall through before completion.
Up until recently, 30% was accepted as the industry norm. So why are more sales falling through? And what can you do to make sure your sale goes through without a hitch?
Withheld information
Property search guru The Buying Agents suggests that it is partly due to a lack of due diligence practiced by inexperienced homebuyers. They tend to be caught out by lease restrictions, physical issues like damp and not knowing why a property is returning to the market. The rush to get the process going, particularly in situations like open house viewings, may mean that buyers don't spend enough time looking at a property and asking important questions.
The Buying Agents also found that vital information was withheld by agents and vendors on a number of occasions. Since Home Information Packs (HIPs) were scrapped, agents need only provide property information questionnaires which may be missing information in some sections.
As a whole, the current conveyancing process doesn't offer much accountability between the agent and the vendor.
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Taking a long time
The buying and selling process in England and Wales has remained the same for years. On average, the whole transaction takes eight to ten weeks to go through. This protracted length is said to contribute to collapses, with many falling through eight to nine weeks into the process.
According to eMoov.com, 19% of homebuyers have even experienced insomnia during the house buying process. 12% said that they had other health issues.
How to stop this happening to you
It’s obviously important that you get the right survey for your property. There are four different types (Basic Valuation, RICS Condition Report, Homebuyer Report and a Full Building Survey) ranging in cost from £250 to £700. Bear in mind that no survey will catch absolutely everything and it may lead to further inspections from the likes of plumbers and electricians, so be sure to plan carefully.
Keep enough money aside in case the sale does fall though. With surveys, for example, it’s advisable to budget for two or three separate assessments.
Another factor that causes plenty of property sales to collapse is gazumping, where another buyer outbids you after you’ve made an offer. To minimise the chances of this, ask your agent to take it off the market once you’ve made an agreement on the house. Some estate agents actually forbid gazumping so it may be worth sticking with one of those.
Limit the amount of time between the offer on the table and exchanging of contracts. This gives other parties less time to pull out.
Of course, make sure you have your finances in order. If any problems arise due to a simple administrative error, it’s easy to fix. Keep on top of things on your end and be sure to ask key questions concerning the sellers, why their property is on the market, whether or not it's been there before, and any physical damage on the property itself. Ask about the lease, too. Is there anything in it that limits alterations? Are pets allowed? Any information your agent doesn't have at the time, be persistent over the course and keep asking.
Take your time with the viewing, looking at all the details. It's a good idea to go for multiple viewings at different times of day. However quiet it may be in the early afternoon, there could be a neighbour who has music blaring in the evenings.
Read Questions you must ask before buying a house.
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Have you ever fallen victim to a property sale collapse? Tell us of your experiences in the comments section below.
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