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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

That when people pull out of property transactions they should incur some of the costs?

26 replies

Fiddledee · 01/11/2010 12:40

Our buyer has pulled out days before exchange - we have paid for a survey on another property and incurred loads of solicitor costs for nothing. This is a stupid system. Don't really feel like going through this again. For the people we were buying from this is the third time a transaction has fallen through.

OP posts:
Sarsaparilllla · 01/11/2010 12:42

Oh I feel your pain and I totally agree, when I was a first time buyer the seller pulled out after I'd paid all my survey fees, it's ridiculous that people can pull out once it's been agreed, the laws really should be changed like they are in Scotland so you're bound to the sale once it's agreed.

NinkyNonker · 01/11/2010 12:42

YANBU. I feel your pain.

NinkyNonker · 01/11/2010 12:42

YANBU. I feel your pain.

scaleymcnamechange · 01/11/2010 12:45

Yanbu.

A long time ago I worked in an Estate Agents and for a small fee, about £30 iirc, you could buy an insurance policy against this sort of loss. They were popular and we sold lots of them. The property sales fall-through rate is about 30%, or was at the time.

It was a General Accident policy - I don't know if that company even exists any more, though, sorry.

senua · 01/11/2010 12:45

Simple: you ask for a non-refundable deposit. If they balk at this then you know that they are not serious and you take up someone else's offer.

drfayray · 01/11/2010 12:48

Here in Australia, buyers have to pay one or two percent of the purchase price when they put in an offer. If they pull out, the vendors get to keep the money. This happened to us.

UnseenAcademicalMum · 01/11/2010 12:48

We pulled out of buying a property once because the extension on the house didn't have planning permission and we wouldn't have been able to get buildings insurance on it. Sellers were quite aggresive about it but they shouldn't have tried to hide something like that.

Original poster
Fiddledee · 01/11/2010 13:08

senua - I don't in this market you can ask for a non-refundable deposit getting a buyer at all is a struggle, will look at the insurance policy option though

OP posts:
Chil1234 · 01/11/2010 13:13

Ask your solicitor about idemnity clauses... it's like insurance.

emptyshell · 01/11/2010 13:26

Definitely not being unreasonable - we're buying at the moment, and if it falls through - we'll have incurred charges to the level meaning we probably won't be able to buy again in the near future. Yes, we should have a contingency fund, but we're putting almost everything we've got into scraping the deposit together - like most first time buyers do.

TattyDevine · 01/11/2010 13:32

"Senua - I don't in this market you can ask for a non-refundable deposit getting a buyer at all is a struggle"

But you want them to pay some of the costs if they pull out? Its the same thing really.
I.e, to administer a system where by law they did have to pay the costs if they backed out, the only way would be by way of a non-refundable deposit, otherwise people would not pay, it would be a nightmare to "chase" the debt.

It would mean even less buyers on the market (depending on other factors) - but more "serious" buyers.

But YANBU - this system sucks, it can be really awful.

plupervert · 01/11/2010 13:37

senua, I once tried to do a non-returnable deposit for a rental contract, but the F---ers seemed to think that meant we were willing to lose the £1,000 if we pulled out, whereas nothing would happen to the landlords. I was particularly furious when the LL and EAs arsed around for ages with our contract, making us fear they were going to pull out!

It's a silly system as it stands, as it gives far to much power/leeway to the party which already has all the power in the transaction (buyer in a buyers' market, seller in a sellers'market).

Insurance sounds a great idea, really interesting; thanks, scaleymcnamechange!

chandellina · 01/11/2010 13:40

but wouldn't this hit you too then- as a buyer - you would also be liable for costs, possibly more than you'd be getting in compensation.

zipzap · 01/11/2010 13:50

We managed to do it once on relatively recently on a property - we agreed not to pull out and allowed a certain percentage of the deposit to be non-refundable.

however, as the survey hadn't been done, we did have a clause in it that said if the survey found anything untoward that would put us off buying the property (as per UAM's lack of planning permission) then we would have been able to back out and not lose any of our deposit.

Seemed to be a win-win situation as we knew we wanted to buy the house - and thought survey should have been ok but obviously wanted to check! Not sure what would have happened if sellers dropped out though after we'd spend money on survey etc...

plupervert · 01/11/2010 14:03

yy, definitely get-out clauses for "non-performance". For example, with a rental contract, you can't arse around till the last minute and expect the potential tenants to still sign up, as tenants have their own time-pressures!

Similarly, with buying, you would need a clause to let you out without penalty if the transaction was simply taking too long, due to deliberate acts; I'm not talking about a chain's collapsing, but about hiring an incompetent solicitor, or making endless conditions. In the case of the incompetent solicitor, let the wronged seller/buyer sue the solicitor for the loss, as it does sound as though that sort of thing is needed (I am astonished that the incompetence some solicitors still get paid for!). After all, certain mortgage deals only last for a certain period, and pulling out of one offer because it looks unlikely to complete in time is quite a reasonable thing to do, economically!

bumperella · 01/11/2010 14:03

I totally agree that people dropping out /changing terms/etc is really appalling behaviour.
But until the survey and conveyencing is complete then the agreement can't really be binding, as you don't know all the relevant facts about the property.
It isn't binding in Scotland until the buyer and seller agree - you can still drop out if something amiss is found (or for that matter, if you just change your mind).

cakewench · 01/11/2010 15:43

We had a bid accepted on a property, but once we had a survey done, we found out it was worth about 10k less than our original bid due to a number of repairs which were needed (to the roof etc) which we had no idea about until we had the survey done. The seller was unwilling to budge on the price at all- it was either our original bid, or they were putting it back on the market. So, it's back on the market, and we're out the solicitor and survey fees.

It's not just sellers losing out. Some of you are saying we should have had to put down money to show we were 'serious' buyers- we certainly were serious. I just don't understand why we should have been expected to pay an extra 10k for repairs we couldn't have possibly known about when we made our original bid.

plupervert · 01/11/2010 16:14

"I just don't understand why we should have been expected to pay an extra 10k for repairs we couldn't have possibly known about when we made our original bid."

Well, you shouldn't be expected to, cakewench. I guess it just takes more people to make a lower offer/walk away to prevent sellers from being so stubborn about something which is actually quite a lot of money.

plupervert · 01/11/2010 16:17

maybe not "prevent", but "teach".

I'm not saying that to be arsey about sellers in particular, but it does sound as though the two parties have to find a new relationship, as the old one is utterly dysfunctional. Too much power to the one who already has the market power, as I already said....

lalalonglegs · 01/11/2010 16:21

Isn't that the problem with the Scottish system - you have to have a survey done before you put in an offer and then you have no guarantee that your offer will be accepted as most houses seem to end up in some blind auction? Everyone goes on about how marvellous the Scottish system is but if you ended up chasing house after house, always losing out by a few thousand or a few hundred and having shelled out for a survey each time, I think it would seem far less attractive.

spiderpig8 · 01/11/2010 16:33

UUMM but you've done the same thing to your seller haven't you?

Original poster
Fiddledee · 01/11/2010 16:47

the only reason that we can't proceed is that our buyer pulled out - maybe he should compensate the rest of the chain too!

OP posts:
plupervert · 01/11/2010 16:50

I wasn't suggesting compensation for that sort of reason.

Maybe insurance is the safest way to go, rather than the contract, which is starting to seem more and more complicated...

spiderpig8 · 01/11/2010 17:40

But maybe your buyer had an equally valid reason

bumperella · 01/11/2010 17:48

lalalonglegs - you're right, that part is an absolute nightmare. When you end up falling for a v popular, one-off property the actual price can be way over the offers over price (e.g. 50% over the offers over amount before prices came tumbling down again). But it's more normal now to put in a "subject to survey" offer, and get the survey done if your offer is accepted. If a house is really popular /has lots of offers at the closing date, then a "subject to survey" offer might not be viewed as kindly, but then if the vendor is confident that the house needs no repiars it might not matter to them.
Either party can back out at that stage anyway, even after an unconditional offer has been accepted. The big difference is the stage at which you can pull out.

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