Reasons for purchase offers failing

davidmcn

Shedman wrote: »

I am presuming that it works differently (and maybe more satisfactorily in Scotland) as once you submit an offer I believe it is binding?

You believe wrongly.

While in theory the offer constitutes a fully-blown contract and could be immediately accepted, in practice these days it's likely to be entirely conditional on the buyer getting a mortgage offer / selling their own property / getting their own survey etc. Sellers are likely to have problems with one or more of the standard clauses anyway if things aren't entirely squeaky-clean with their own property or their solicitor is feeling awkward.

So at most it's merely the case that in Scotland we tend to be in a binding contract at a relatively earlier stage than would be the case in England. These days buyers don't want to commit themselves properly until they have a mortgage offer in black and white, and that can often be delayed until shortly before people are packing up.

In general though I feel everyone in Scotland is a bit more motivated to get the deal done - both sides are lawyered-up from the start (so buyers are better informed and are probably taking things more seriously at the offer stage), we have Home Reports so buyers can read surveys etc before they even book a viewing, we don't have leaseholds and all the nonsense which goes with them. We're a bit less obsessed with "chains" than in England, though obviously people may well have to sell before they can buy and so on.

Crashy_Time

Bass_9 wrote: »

Good old crashy.

On a serious note though, it does amaze me when you hear that a sale has fallen through because the potential buyers could not prove they had the finances to buy it... What a waste of time for everyone involved. Myself and my partner have meticulously worked out our finances for a range of prices and we would never offer a bid that we couldn't reasonably afford.

That said I'm pretty risk averse. :eek:

You almost get there, but seem to be a couple of pieces short of the full jigsaw .... :rotfl:

TamsinC

We have just pulled out of a sale - on each consecutive visit to the property more and more issues (not structural survey stuff) came to light. At the last visit a new neighbour disagreement came to light and the parties were at an impasse. That along with the 9 other biggish issues that had been raised since the offer (and the many smaller ones) just became too much. The final straw was the information given that bikers like to ride up and down the road a lot in the summer. In our supposedly peaceful idyl! :eek: The finances stacked up, we weren't worried about the market or interest rate rises, it was just too many issues. I'm sure the vendor is furious with us we had hoped to complete last month but it never happened because of this impasse. But for us it was now better to walk away. We've done it once before too. Completed on 3 houses and walked away from 2.

You can spend hundreds of thousands on a house - it needs to be right. It's an expensive mistake to make otherwise.

Shedman

davidmcn wrote: »

You believe wrongly.

While in theory the offer constitutes a fully-blown contract and could be immediately accepted, in practice these days it's likely to be entirely conditional on the buyer getting a mortgage offer / selling their own property / getting their own survey etc. Sellers are likely to have problems with one or more of the standard clauses anyway if things aren't entirely squeaky-clean with their own property or their solicitor is feeling awkward.

So at most it's merely the case that in Scotland we tend to be in a binding contract at a relatively earlier stage than would be the case in England. These days buyers don't want to commit themselves properly until they have a mortgage offer in black and white, and that can often be delayed until shortly before people are packing up.

In general though I feel everyone in Scotland is a bit more motivated to get the deal done - both sides are lawyered-up from the start (so buyers are better informed and are probably taking things more seriously at the offer stage), we have Home Reports so buyers can read surveys etc before they even book a viewing, we don't have leaseholds and all the nonsense which goes with them. We're a bit less obsessed with "chains" than in England, though obviously people may well have to sell before they can buy and so on.

Thanks for clarification and education. For some reason I had it in my mind that it was sealed bids and highest bid was taken and was immediately binding. Must have been getting mixed up with something else.

Davesnave

Fairyliquid wrote: »

I did consider getting a survey in order to preempt any objections that a buyer had, that is fix anything that showed up before they did a survey.

In my experience, physical deficiencies are the easiest things to fix and account for in negotiations. It's the unfixable that usually puts me off.

In theory, it ought to be easier to find suitable property nowadays, as there are far better search tools available than, say, 20 years ago, so some expense and hassle can be eliminated. No one needs to travel these days to discover exactly how a property is orientated, what the neighbouring area looks like, whether it has a flood risk, and so on.

However, more data at a surface level only weeds out the 'no chance' properties. As GM says, it's when people drill down into the specifics that the more exciting properties are rejected. It can be something as capricious as an altered school admissions policy that finally scuppers the deal!

Ogriv

Shedman wrote: »

From my recent experience with a recent leasehold flat offer, that we pulled out of after a good number of weeks, you cannot make an informed decision until you have received copies of the lease, the management pack, copies of the service accounts, etc and these can take many weeks to come through. There does need to be some mechanism to ensure that these items are available at the time of viewing or very near thereafter otherwise it's inevitable that costs will be in incurred throughout the chain and then it all collapses once unresolvable or unacceptable matters are uncovered in these documents.

Agreed - there is just so much information that takes months to come through. Buying leasehold flats I am experiencing key information taking 4 or 5 months to come through. So at the start you can only make the most superficial decision on the most superficial information supply. After the 5 months have gone by of course, you owe the conveyancers a pretty penny.

There are also sellers who are indecisive - I had one who pulled out after 4 months, only to ring up the following Monday to ask if I would rent it from her while they did works on the property (related to their lack of building regs), with an eventual sale still in the pipeline. When I tried to get some more specifics on this wacky suggestion, she went silent, and then after 5 months when I told her my mortgage offer was about to run out and she would have to supply some information to get it extended, she failed to even answer my email. There had been all kinds of other shenanigans in the interim, including its mysterious reappearance on Rightmove. It was then that I pulled out, after 5 and a half months of ridiculousness from her.

As for buyers without firm finances, I personally am only borrowing around 3 times my salary and had my firm mortgage offer within a fortnight at the latest.

Fairyliquid

Very informative, thanks to all.

MobileSaver

Crashy_Time wrote: »

People are waking up to the fact that they will be in negative equity by buying now if interest rates rise and they are just looking for any excuse to pull out of purchases.

Crashy, you do post some utter garbage.

The average deposit is 17%, a percentage or two of interest rate rises are not going to cause people to be in negative equity.

Transaction volumes are up 33% from 5 to 10 years so clearly people are not "just looking for any excuse to pull out of purchases."

googler

Shedman wrote: »

Thanks for clarification and education. For some reason I had it in my mind that it was sealed bids and highest bid was taken and was immediately binding. Must have been getting mixed up with something else.

Well, when an offer is accepted without qualification in Scotland, the seller is agreeing to move forward on all that is in that offer, which includes;

price
entry date (settlement/completion date)
inclusions and exclusions (fixtures and fittings)
all contract terms governing the sale (see 'Scottish standard clauses')

... all of which, it seems, get thrashed out months later in E&W

Surrey_EA

Looking through my sales book as to the reasons for recent fall throughs:

• Buyer was getting divorced, then decided on last minute reconciliation.
• Buyer spooked by especially negative surveyor
• Buyer decided property was more of a project than they were happy to take on.
• Vendor died.
• Vendor decided not to move at all.
• Buyer decided to go for another property.
• Vendors son made redundant and needs to move home, won't fit in to vendors new property, so no longer selling.