Old lady in a pickle, needs advice

Tiglet

(I've been asked to get advice on this by a friend for someone she knows. I haven't spoken to the person involved myself, but I think that this is a reasonably accurate representation of the situation.)

An elderly lady, whose husband is ill with cancer, has been suffering from harassment by her next door neighbours. To escape from this, she decided to sell her house to move two doors along the road.

She made the decision in something of a panic and offered to buy the new house even though it is in worse condition than her own, and more expensive. However, she has now decided to pull out of the deal.

She says that she has already signed a contract on the new house but that no money has changed hands in relation to either house and she has to see the solicitor again to sign another contract. I have said that she shouldn't sign anything else until she knows exactly what the implications will be.

Apparently she has also agreed the sale of her own home, although I don't know what stage this has reached. I said she should speak to her solicitor about it but he said he will charge £400 just to discuss the matter. I understand that she has also been to CAB about it but they have said that they don't give legal advice.

Please can somebody explain what she is likely to lose if she pulls out? I understand that if contracts have been exchanged, the buyer stands to lose their deposit but I'm not sure whether this has happened. Is it possible that contracts have been exchanged on her purchase without any money changing hands? If this has happened, how much will she be likely to lose?

Regarding the sale of her house, what will she stand to lose if she pulls out? Again, I'm not sure whether or not contracts have been exchanged.

If she does stand to lose her deposit or be penalised for pulling out of the sale, is there any way she can avoid this, or is she relying on the goodwill of the other people involved?

Thanks, and sorry for the somewhat sketchy nature of some of the details

PasturesNew

The black/white answer is:
- if neither property has reached the Exchange stage, she can pull out without any worries, just a potential bill from the Estate Agent (for their full fees) and the solicitor, plus losing the search fees etc.
- if either/both have gone past Exchange, then it's a whole different kettle of fish.

Fire_Fox

If contracts have been exchanged, she can be taken to court to either enforce completion or for costs/ damages. See Welshwoofs thread: http://forums.moneysavingexpert.com/showthread.html?t=1806123
This lady needs to speak to her solicitor urgently to find out whether she has or has not exchanged. I have no idea why the solicitor is saying he will charge £400, it may be she has the wrong end of the stick here.

G_M

Normally solicitors get their clients to sign the contracts in advance of 'Exchange'. This will happen for both her purchase and her sale. That means the solicitor can Exchange with the other sides when everyone is ready. Also normally, at Exchange an amount (normally 5 or 10% of the purchase price) changes hands.

So it sounds like she has signed (one of) the contract(s) for her solicitor but not yet Exchanged with the other side(s). She can pull out in that case.

Her solicitor may charge for the work he has done, though this depends on her contract with him.
Her estate agent also may charge for introducing a buyer who was willing/able to buy, though again this depends on the terms of the agreement. Sometimes they only charge if/when a sale actually takes place.

Tiglet

Thanks for the advice and the link. I don't know what the deal is with the solicitor but it does sound strange. I think the long and the short of it is that she acted in a panic to begin with and she's now out of her depth and doesn't really understand what's going on. I'll post more details if I find out any more or if I've got anything wrong