Friday 12 April 2019

Finance Fridays – Home sale failures

We were looking at price changes in April 2019 for last week's Finance Fridays. This week we are talking about problems that arise when trying to sell your home. It's a well known fact that moving house is one of the most stressful things we have to go through. This is made worse when the sale of a property falls through. This can either be the person wanting to buy your home or the one you are wanting to buy. What can be done to try and prevent this happening or dealing with it when it does?

Surveys and searches – Most surveys are done and paid for by the potential buyer after they have put an offer in. If it is your property that is being sold then you should know about any potential land related problems yourself. These include mining searches, if the land was once used for landfill or industrial purposes. They can also show up if there are any planning applications which could affect your property. However, a survey on your home could find things which you were not aware of.

There are various types of property survey which go from the most basic report through to detailing every aspect of the building. The results that come through after a survey has been done is big cause of buyers pulling out of a sale. A survey can highlight defects and faults in a building which need attention. It may not be a lot of work or cost that much to fix but when you are already spending hundreds of thousands of pounds in buying a property then adding to that cost can be off-putting. It may be an idea yourself to pay for a survey to be conducted. You can then show potential buyers it is all-clear or if work is needed to done to remedy it yourself before you put it on the market. If you are buying the property and the survey has highlighted some issues then don't pull out immediately and think how bad the problems really are.

Not sure why – It can be terribly frustrating if a buyer pulls out without any apparent reason. Quite often this has nothing to do with your property but their own personal circumstances. Putting an offer in for a house is one thing but getting a mortgage approved for it is another. It could also be that the buyer was thinking of moving due to job relocation and now that has fallen through. Do ask your estate agent to find out why the buyer has pulled out. If the reason is to do with your home you can see if you can do something about it before it is spotted by another potential buyer.

Gazumping and gazundering
– You've had the survey done, got a mortgage and your deposit is sitting in your savings account. You put in an offer for a property and the vendor accepts it. You think then that you'll be moving in a couple of weeks. Then comes the news that the vendor has accepted a higher offer from someone else. All your plans and costs incurred are now up in smoke. This is gazumping.

On the other hand you are the vendor and accept an offer and just before the contracts are exchanged the buyer lowers their offer. The idea behind this act of gazundering is that both parties are now so far down the buying and selling process that if the vendor doesn't accept it the whole thing will fall apart and they will be back to square one. The only time gazundering is acceptable is when the buyer suddenly finds out something about the property that genuinely lowers its value. Unless this is the case gazumping and gazundering is not nice and extremely unfair so don't do it.

Home buyers insurance – You've found your dream home and have already measured up for new curtains but then the vendor decides to take the property off the market. Perhaps they have decided it is still their perfect property or their future plans have changed. Even worse you can find yourself gazumped. For around £50 a number of providers are now offering home buyers insurance. This can protect you against the costs incurred if your property purchase falls through. Usually the insurance covers costs of up to £3,000 which have been incurred through solicitors fees, surveys and searches plus mortgage fees.

Have you had problems when buying a property? What costs did you incur?

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Finance Fridays

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