Buyer pulling out after exchange of contracts

shhe

I was wondering if anyone would be able to advise me on what would happen if contracts were exchanged on a property but the buyer pulls out and keeps the deposit?

The contract with the estate agent says that fees are payable once contracts are exchanged.

Would the EA fees still be payable?

casper_g

How could the buyer pull out and keep the deposit, assuming you're talking about the deposit handed to the vendor's solicitor at exchange (usually 10%)? The buyer would forfeit this deposit if they pulled out after exchange, and would be liable for any costs incurred by the vendor. These costs might well include the EA fees, which would most likely be payable if contracts had been exchanged -- check your contract with the EA for specifics.

Yorkie1

From what you've posted, yes the fees would be payable.

However, most solicitors / conveyancers go through their entire professional lives without this happening between exchange and completion. The buyer will be in big trouble financially if they do not proceed. I am not an expert but would have thought that you would be able to pursue them for lost costs, even if they are not forced to proceed with the purchase.

BitterAndTwisted

Only a suicidal maniac would pull out after contacts have been exchanged. They buyer would have their @rse in court being sued for substantial sums and that includes the agent's fees.

shhe

I thought there were some instances when if the buyer pulls out they can keep the deposit? Maybe I'm wrong, sorry, this is my first time selling

MissMotivation

Yes, the EA's fees would still be payable. The Vendor would keep the 10% deposit and be able to sue the Buyer for costs (these would include any fees due)

In nearly 20 years I have only had one sale not complete after Exchange of contract.......because the purchaser passed away

shhe

MissMotivation wrote: »

Yes, the EA's fees would still be payable. The Vendor would keep the 10% deposit and be able to sue the Buyer for costs (these would include any fees due)

In nearly 20 years I have only had one sale not complete after Exchange of contract.......because the purchaser passed away

Wouldn't the solicitors relaease the deposit to the vendor, surely I could use the deposit to pay the EA fees?

Running_Horse

Enter the following words into the search box at the top of the forum page:

"welshwoofs after exchange contract"

There was a monster discussion on it a while back.

BitterAndTwisted

This buyer needs to have a frank discussion with their conveyancing solicitor about what will happen if they pull out. Google "Breach of Contract"

LandyAndy

shhe wrote: »

I thought there were some instances when if the buyer pulls out they can keep the deposit? Maybe I'm wrong, sorry, this is my first time selling

Your buyer's solicitor gives your solicitor the deposit monies at the same time that contracts are exchanged. There is no point when the buyer has a signed contract and his deposit. A solicitor that allowed that to happen wouldn't be a solicitor for very long.

wriggly

The vendor can accept the 10% deposit and leave it at that. It is the least-hassle way of proceeding, and should cover estate agent and solicitor fees.

However, after exchange of contracts, the vendor is entitled to sue the buyer for all losses, including the difference in price if the house is subsequently sold at a lower price.

Depending on circumstances, the courts could order the sale to proceed and for the buyer to pay additional costs, although such "specific performance" would probably be more common where the vendor pulls out after exchange.