What happens if a house purchase falls through?
Before exchange of contracts, either party in England can withdraw without legal penalty. The buyer usually loses money already spent on searches, surveys and some legal fees, while the seller loses time and may lose their onward purchase. After exchange, withdrawing is a breach of contract with far more serious consequences.
A collapsed purchase is genuinely disappointing, and often nobody is at fault. Knowing which costs are lost, which are portable and what to do in the first few days makes a difference to how quickly you can start again.
Why do purchases fall through?
The reasons cluster into a small number of familiar causes.
- A survey reveals problems the parties cannot agree how to resolve.
- A mortgage application is declined or the property is down valued.
- Someone else in the chain pulls out.
- A legal issue emerges through searches or enquiries.
- The seller accepts a higher offer, or a party's circumstances change.
What money do you lose?
Search fees, survey fees, any mortgage valuation or booking fee, and work your conveyancer has already carried out are usually unrecoverable. Costs vary widely with how far the transaction had progressed.
Not everything is wasted. A mortgage agreement in principle may still be usable, and your conveyancer already holds your identity checks, so restarting is quicker than starting from scratch.
What should you do next?
Ask your conveyancer for a closing statement showing what has been spent and what remains on account. Ask your broker whether your mortgage offer or agreement in principle can be transferred to another property.
Then keep your records. The notes, contacts and documents you gathered will save considerable time on your next purchase.
Key takeaway
Before exchange, a collapse costs money and time but carries no legal penalty. Gather a closing statement, check what your mortgage adviser can carry over, and keep your records for the next attempt.
Frequently asked questions
Can I get my money back if the sale falls through?
Search, survey and valuation fees are generally not refundable because the work has been done. Money held on account that has not been spent is normally returned by your conveyancer.
Is the seller allowed to just pull out?
Before exchange of contracts, yes. In England neither party is legally committed until exchange, which is why moving through the legal work promptly reduces the risk.
How soon can I make another offer?
Straight away. Speak to your mortgage adviser about whether your existing agreement in principle can be used, and tell your conveyancer, who may be able to reopen your file quickly.
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If a move falls through, MyMoveMate can produce a PDF record of your notes, contacts and progress to keep, so nothing is lost when your data is deleted.
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