Buyers pulled out today

[Thefaceofboe]

Our buyers have pulled out today, the day we were due to exchange. My house is in boxes ready to relocate across the country. My child is due to start school in September and we both have jobs lined up. We have spent so much money (more than we have) on this. I’m in total disbelief. Not sure what I want from this thread really

One of the problems we have with the current system is that contracts are being exchanged (made unconditional) on the same day that the whole sale completes. That’s why people can pull out legally on the day when everyone is packed up etc etc

The original system was that you exchanged signed contracts when everyone was happy with the conditions and then had a few weeks to get ready to move on a set day that everyone was committed to because they’d paid their deposits.

Somehow over the past few years people have started accepting the nonsense that you exchange signed contracts and complete the sale on the same day. Much more stressful than it needs to be and can go wrong as in OPs case.
in England we all need to start pushing back against this.

The problem is the 20+ weeks it takes from agreeing a sale to completion, too much scope for circumstances to change and things to go wrong. Goodness knows why it takes so long in these days with internet/email. I can remember back pre 2000 when I worked in mortgages that we could get someone from mortgage application to moving in in 2 weeks if all solicitors were onside. My son used his solicitor friend to purchase recently and even tho he was totally on it it still took ages for searches/other solicitor etc in a chain of 2. It’s got to be quicker

I agree it all takes so long. As they were first time buyers and we were originally unsure when our vendors new build would be complete, they asked if we would be willing to break the chain and go into an air b&b if needed, and I said yes. Which adds more frustration pulling out at this stage as they’ve even arranged an extra complicated step for us, all just to not go ahead with it.

Our EA has just phoned with 5 bookings for tomorrow and over the weekend! Phew

@Thefaceofboe If it’s any consolation, a relative is selling their property. They got asking price on day 1 because the buyer was far along in another chain & it collapsed. They didn’t want to lose their own buyer & have everything in place. When it comes to offers, it made theirs compelling. It’s on track to complete very quickly.

I'm so sorry this has happened
Years ago when I bought there was always a delay of around four weeks between exchange of contracts and completion.
A deposit of 10% was paid on exchange. Then if anyone pulled out they lost their deposit. So it was relatively unusual for people to pull out.
I didn't realise until my daughter moved house recently that exchange and completion now often happens on the same day. Making a much more stressful situation as people can pull out at the last minute.
I think it would make sense if there was a requirement for their to be at least a couple of weeks between exchange and completion.

There is no system.

Houses which are sold by private contract, that contract can be anything the seller wants it to be, and of course what the buyer is willing to accept.

No one can be forced to accept exchange and complete on the same day, so if someone choose to accept that condition they have to accept it on the understanding of the consequences if it all goes wrong.

Correct, and it's madness to exchange and complete on the same day, and very high risk. I have moved quite a few times and have always insisted on 2 weeks.
Nothing happens until exchange is completed, no boxes packed, nothing, removals provisionally booked in that is all. I'd rather not sell than have that pressure.
I also always buy that £70 policy with the solicitors that covers the majority of the costs, once a vendor pulled out on me 2 days before exchange, my total loss was about £250.

OP was due to exchange only, I don't see anywhere that it was a simultaneous completion.

We actually did them simultaneously 5 years ago, but that was because it was recommended by the Law Society during the pandemic restrictions.

The average is around 2 weeks from exchange to completion, and that's still crazy because when someone pulls out just before exchange (as they legally can with no repurcussions) that's still such a short length of time. We had our vendor pull out just before exchange and we were due to complete the following week. We went from knowing we were moving house next week, stuff packed (because we have kids and work, we couldn't just leave a week to pack the whole house) to suddenly just...not moving house.

I do think we should have a deposit on offer accepted system as many countries have. We were also previously gazumped a few weeks after our offer was accepted and that was heartbreaking too. Just such an unnecessary system.

The idea that people think there is a "system" annoys me.

What also annoys me is the idea that if you start to impose restrictions in law, then yes it may benefit one party, but when one party benefits, another one loses.

So the imposition of some sort of "system" here presumably most people would want it to be impossible for buyers who have gone some way down the sales process before exchange to pull out without some sort of financial penalty or consequence. Which would mean the buyers losing and the sellers gaining.

The recommendations should be the same whatever, basically understand the process and the risks involved and understand the contract that is being signed and the consequences of it. Plan for the "reasonably" expected. For example buyers pulling out before exchange is pretty common and should be planned for.

Buyers pulling out after exchange much less so, so you have to ask yourself the question whether it is worth planning for that.

The problem then becomes on what conditions do you lose your deposit.

All you do is shift the gain/loss to some point earlier in the sales process.

The reason it often takes so long from offer to exchange is because people are checking out whether the house is really worth what they are paying for it.

Should I lose my deposit because the survey finds the house has major structural problems ? Should I lose it because one of my parents has just died and I want to pull out of the move ? Should I lose it because I just lost my job and am worried about paying the mortgage ?

The list is endless.

And all of this, bearing in mind that there is nothing in law at the moment that says a seller can't request that a buyer places a deposit on offer. It's a position a seller can insist on if they want. Whether or not a buyer would be willing to do it is another issue. If this sort of behaviour benefited both parties it would become standard. The fact that it is not standard tells you it benefits only one party - the seller and therefore places an extra cost on buying a house for the buyer in an environment where house buying is already unaffordable.

You can’t always plan for people pulling out though - life simply doesn’t work like that for a lot of people. People have caring responsibilities, jobs, commitments. Packing up a 4 bed house takes weeks unless you don’t work and can commit all day everyday to it.

You HAVE to assume it’s going ahead and prepare accordingly. Then, when people back out, it’s catastrophic as OP has sadly experienced.

It IS a system and it’s deeply flawed. And emotionally torturous. Going through so much work and money knowing people can cut it short anytime just isn’t fair. The government need to change it and I’m sure they will at some stage and it will be one of those things people look back on with wonder why it was ever allowed to be like that!

Its really not that expensive all things considered to get the Removals company to do a full pack - I've never done any packing, just let them come in and crack on - the speed and efficiency is amazing to behold, never had a single broken item and if they pack its all insured by them.

I don’t think those questions stop there being a deposit. Do you think it’s ok for people to back out after exchange due to those reasons? You can lose family members, jobs, have illness before completion and after exchange; you still sacrifice the deposit.

In my mind, you should have a 4 week window after offer to arrange a survey if that’s what you want. Then 4 weeks to renegotiate/think through the results. After that, you pay a deposit and that’s that. Yes, things change, but it can change the minute you’ve walked through the house, then what?

Absolutely people should take the home buying process seriously and put their money where their mouth is. The man in OPs situation clearly wasn’t serious about his relationship so he shouldn’t have been playing house and offering on a families property. If he was to stand losing money, I’m sure he’d have not bothered looking in the first place.

You can plan for anything.

You can put your belongings into storage. You can go into rented. You can stay with relatives. You can make your life more flexible in anticipation of uncertain events. You can have a strategy planned out for bridging loans.

It costs money and may ultimately turn out to be not necessary. But to say you can't plan for it is wrong.

The alternative is to place extra costs on the buyer.

There is no "system", other than the one the buyers and sellers choose to define. You can sell a house in a day if you want to, if both buyers and sellers are in agreement. If there is a system, tell me what is it.

In my mind, you should have a 4 week window after offer to arrange a survey if that’s what you want. Then 4 weeks to renegotiate/think through the results. After that, you pay a deposit and that’s that.

There is no reason why as a seller you couldn't impose that condition on a buyer at the current time if you wished to.

Whether the buyer would accept that or not, is another question. They might demand a reduction in sales price as a consequence. Everything, flexibility, more certainty, boils down to a cost that someone somewhere has to pay.

people who pull out last minute on exchange day should cough up all legal fees the seller has spent. It's disgusting behaviour from them OP. Deepest sympathies

How would the conveyancers complete the legal process in one day? According to a colleague, you can buy a house in Romania in an afternoon, but the legal process in England and Wales is so complicated that I've never heard of it happening anywhere near that quickly. How would they get the "searches" back in time. Not that I cared about some of the searches and would have been happy to do without them.

Your EA sounds great, OP. As does your mum.

This will work out in the end.

Agree. In some other countries there’s a contract to buy which carries a penalty of lost deposit if buyer pulls out. I don’t understand why that’s not "allowed" here.

They didn’t get to exchange so there is no deposit paid.

In Scotland the seller pays for an Independant survey that is if used with the sales details or from the EA pre viewing. Everybody knows what they are dealing with upfront without delays surprises or extra expense.

I’d sort out somewhere to rent in your new area so jobs and school go ahead as planned. Rent yours to cover costs short term if it’s unlikely to sell quickly.

So bit of an update. My amazing parents have suggested a house swap, where we live at their house and they move down here until we are able to find a buyer and somewhere new to move. They are retired but have all their family and friends here, so not an easy decision for them. The only catch is we have to look after their chickens Really sad about the house we’ve lost, but have decided to walk away and keep looking. A bridging loan wasn’t possible as I’m on maternity and then technically unemployed for a month

Aww that’s amazing! That must be a weight off your mind with jobs and schools!