Abortive house sales. What can you do?

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Twelve months ago, the fall through rate for house sales was just over 30 per cent (in March 2012), double the rate at which house sales fell through in 2006 showing how difficult it had become to retain a buyer until completion.

Fall through rates continue, more or less unchanged.

So what can people do to help minimise this happening to them? There is no one answer, but there are certain keys steps that people should take before preparing for their house move:

1. Choose an effective estate agent

As with any service provider, it is critical to choose wisely. Recommendation, expertise, standing in the locality, they all play a part in deciding which agent is best for you. Always consider selecting three valuations, and judge each by such things as what a buyer might think of the agent on first impression, how knowledgeable they are, how confident they are, and what they feel they can do differently to other estate agents. An estate agent who is prepared to do more than just find a buyer, but in fact keeps involved right through to an exchange of contracts, is crucial.  They can help chase parties, other estate agents and conveyancing solicitors, all along the property chain, or they can simply facilitate the passage of documents locally.

2. Choose an efficient conveyancing solicitor

How prompt (but certainly not overlooking legal accuracy) your conveyancing solicitor will be, and how good at communication they will be, will have a direct impact on whether the process causes people to get cold feet through long delays. Again, recommendation can be important in deciding who to use, whether via family and friends, or indeed via the local estate agent, who will naturally side with the most efficient conveyancers in their same town. But simply choosing a conveyancer because they are the cheapest can result in their lack of commitment, as can you overlooking ‘who’ in any particular conveyancing team will be looking after your matter. Are they even a solicitor or chartered legal executive? Take an interest in who your conveyancer will be, and judge from your initial conversations with them how they would propose to handle a prompt transaction if it were needed.

3. Secure mortgage finance early

The earlier you investigate your ability to raise the amount of mortgage you need, the better. Mortgage availability is a lot less than in peak 2006 times. Lenders are far more cautious following the banking crisis, and so leaving the start of the process until after you make an offer on a house is perhaps unwise. You may be disappointed not to be able to secure as much lending as you had hoped. Whilst you may be prepared to search for a good mortgage deal yourself, do not overlook the advantages of using an Independent Financial Adviser who specialises in mortgages, as they deal with all the lenders on a regular basis, and know the information that lenders will seek from intending borrowers. That can position you for a far quicker application process.

4. Surveys

Many house moves have fallen through due to an adverse survey carried out mid way into a purchase. The timing of a survey is therefore important. Offers to purchase are invariably made subject to survey. A vast amount of buyers commission surveys almost immediately, which then reveals any problems immediately. But do not be tempted to avoid a survey. Always consider a survey, however old the property is.

5. Serving notice on your Landlord

As a buyer, your seller, or more likely the chain above, may not know that because you are in rented accommodation, you will need to serve notice on your Landlord to be able to finish the tenancy agreement. That can be a month, sometimes two months. Warning the seller so they in turn know to warn their own sellers is advisable. The timing of when you serve the notice is also a factor, though a judgement call really. If you serve it too early and the seller withdraws, you may end up homeless. Serve it when the chain is ready to exchange contracts and people may not be willing to wait. You may want to think about exploring with your landlord whether they would be flexible on your notice.

In summary, even by taking the above steps, there is little you can do to control another party in the chain who fails to, but if you are prepared yourself, it could prevent the fall through of your house move.