What to Do When a Seller Pulls Out of a House Sale

Unfortunately, a house sale can fall through at any point, for a variety of reasons, and it is rarely a decision that is made lightly. However, it can be particularly disheartening for the buyer who may have put a lot of hope in purchasing their dream home. If you’ve been in the process of buying a property and the seller pulls out of the sale, what are your options?

Is it legal for a seller to pull out of a house sale?

It is legal for a seller or the buyer to pull out of a house sale at any point up until contracts are exchanged. Even if one party has paid fees throughout the sales process, the sale will not be legally binding until contracts have been exchanged.

Once contracts have been exchanged, if the seller or buyer pulls out, they will be in breach of contract. In this case, the other party can sue the one that has pulled out.

What to do if the seller pulls out of a house sale before exchange?

As the buyer, you should start by figuring out why the seller has pulled out of the sale, by speaking to the estate agent. There can be a variety of reasons why the seller has had to pull out, including a breakdown in the chain or receiving a higher offer. The reasons could affect how you approach the situation.

Make a higher offer

When the seller pulls out of the sale due to a higher offer, it is known as gazumping. It is a legal practice unless you already have a contract in place stating that the seller will not be able to consider other offers for a period of time before contracts are exchanged. If you have this type of agreement in place and the seller accepts a higher offer, you will be able to sue them for breach of contract.

If you don’t have this agreement in place, you can make a higher offer. The seller will not have any obligation to accept your offer, but they may decide to for the sake of speed and to save time starting the sales process from scratch with a new buyer.

You should bear in mind that increasing your offer will change your mortgage and could affect whether you’re eligible for the loan. You should also consider how much the property is really worth and if you might be able to find a similar alternative property elsewhere.

Delay the sale

Sometimes, the seller may pull out of the house sale because there has been a break in the property chain above them. Another sale falling through may mean they are unable to move and so cannot sell their property. In this case, you may be able to speak to them to pause the sale. If your timeline allows and the seller still plans to move at some point, you can wait until they are in a position to sell.

Request compensation

If the seller is committed to pulling out of the sale, the buyer may be able to reclaim certain costs they have incurred. This will include any conveyancing work that has been carried out and any fees paid for searches and surveys. However, the seller will be under no legal obligation to cover any of the costs.

Find an alternative property

When you’re buying a property, it’s always best to have a few back-up properties ready, in case a sale falls through. If you make an offer on a property, think about what made it attractive to you and look for alternative homes that have these features. It can be disheartening when a sale falls through, but often people will go on to find another property that they love even more.

What happens if seller pulls out after exchange?

The seller pulling out after exchange is rarer as the exchange of contracts enters both parties into a legally binding agreement. However, it does still occur and there are a few options for the buyers if they find themselves in that situation.

Serve a notice to complete

If the seller pulls out after the contracts have been exchanged, then buyer will be able to issue a Notice to Complete to the seller. This gives the seller 10 days to complete the sale and they will be required to pay a daily rate of interest to the buyer until the sale is complete. If the seller is still unable or unwilling to complete the sale, they will be in breach of contract.

Reclaim costs incurred

If the sale does not complete, the buyer can reclaim the deposit they have paid on the property. This will rescind the contract.

If the seller pulls out after exchange, the buyer will have to return any documents received for the property. However, the seller will be liable to cover the cost of this. 

The seller will also be liable to pay any other fees, such as legal fees, incurred by the buyer as a result of the sale being cancelled.

Who pays solicitor fees when seller pulls out?

If the seller pulls out before contracts are exchanged, the buyer can request compensation for their solicitor fees. However, there is no obligation for the seller to cover the costs.

In the event of the seller pulling out after exchange of contracts, the buyer will be able to reclaim for solicitor fees they have had to pay. This is because the exchange of contracts is a legal agreement, and when the seller pulls out, they are in breach of the contract.

If you’re looking to sell your house, Gaffsy can help. We buy any home, in any condition. We’re a cash house buyer so you can sell your house fast and stress-free. Get your free cash offer today or call us on 0207 459 4546 to speak to our team.