Why home sales fall through – and how to prevent it

There are numerous reasons that a house sale might fall through, from a simple change of heart (or circumstance) to something termed gazumping. While it may be frustrating, you will still have options available to you if a deal does fall through—and there are even ways to prevent it from happening entirely.

Reasons many home sales fall through

Change of heart and mind. Occasionally, a potential homebuyer will simply have a change of heart and mind. Take into account that circumstances often change, such as a breakdown of a relationship or losing a job, and you can see why this is a fairly common reason for a house sale to fall through. In any case, there is nothing you can do if the homebuyer is no longer in any position to move.

Gazumping. This is a term for when a seller gets a higher offer after a home sale has been agreed upon verbally, but before contracts are fully drawn up. It is unfortunate, but since there are homebuyers out there who will reduce their offer opportunistically before the exchange of contracts, you may understandably pull out of the deal at this stage.

Poor survey. Potential homebuyers survey property, which can shed light on any defects in the home that may have been hidden previously. Buyers could revise their offer down if their costs in upgrades or renovations are set to increase—which you may then be forced to reject.

Unable to secure a mortgage for the property. This reason is fairly straightforward, in that it is exactly as it sounds. The person hoping to purchase your property very well may have a mortgage in principle—which is not the real thing, however. Until they are able to secure a mortgage—and get it approved—they will not be going anywhere, and you will not be able to sell to them.

Slow conveyancing. If they are not willing to wait, slow conveyancing is a good way to put potential homebuyers off.

Problems in the chain. This happens when the deal is near the finish line. Your buyer is ready to move but is stopped by delays, which could make them impatient.

Real estate agent issues. This may sound broad, but if there are any issues with the real estate agent, your deal is in trouble. These types of issues can include not following up on paperwork or poor negotiation, each of which can have the same result—your house sale falling through.

What happens if a sale falls through?

While you will likely lose money if your sale falls through and you need to sell your home quickly, you do have options. While it is frustrating if your property sale falls through after your mortgage has been approved, all is not lost.

One way to achieve a quick sale is an auction, but you should know this can mean you only get up to 80% of the home’s market value. Another option is to hire multiple agents, meaning you will have more people working to sell your home. It also means, however, that you will end up paying more in commission.

How to prevent home sales from falling through

Pre-approved buyers. You can help minimize any disappointment when attempting to sell your home by requesting that your real estate agent connect with potential homebuyers who have been pre-approved for a mortgage.

Make sure the house is surveyed properly. Most buyers survey a property before they purchase, which is a good decision. Surveys can uncover any issues with the home that could potentially decrease the cost. Ensuring you have had your property surveyed previously will help you determine possible problems instead of being caught out in the middle of a sale. It will make a major difference if you are honest about any issues and have them fixed, as needed.

Set expected timeframes upfront. By communicating your expectations from the start, you can limit longer delays. For instance, it will help to communicate to your homebuyer that they should apply for the mortgage within seven to 14 days, as well as pay their searches with their solicitor as well. This is a good way to weed out potential buyers who are less serious. It also not only sets a good tempo, but establishes better communication channels throughout the remainder of the sale.

Keep moving and keep talking. If the process is drawn out it is more likely that issues will arise. You can avoid this by communicating with your conveyancer and asking them to be in contact with the buyer’s legal team as well. Your real estate agent can act as a go-between as well, communicate with all the parties involved, and keep the sale moving.