FTB Question - What if an offer is cancelled by the seller

PacoAGE

I imagine that before exchanging contracts you as a buyer had to pay about £1,500 to a conveyancing firm and some more to your solicitor to do some checks, and a survey, and maybe a buildings insurance. If after all that, the seller cancels the offer, is all of this money completely lost? Thanks.

FtbDreaming

Yes I think so. It’s risky but that’s how it is. 

AdrianC

Yep. Either side can pull out for any reason or none, right up until contracts are actually exchanged... which is currently usually simultaneous with completion.

Most solicitors will offer a no-sale-no-fee deal of some kind.

bucksbloke

Yes this is the risk with house buying, some solicitors will offer no sale no fee. 
This is why as a seller I won't instruct until valuation is booked by the buyer. I also expect solicitors details within 24 hours of valuation result. 

greatcrested

In essence, yes, though

PacoAGE said:

I imagine that before exchanging contracts you as a buyer had to pay about £1,500 to a conveyancing firm and some more to your solicitor to do some checks,

that would be duplication as they do the same job

and a survey, and maybe a buildings insurance.

buyers generally become responsible for insurance at Exchange of Contracts - not before

If after all that, the seller cancels the offer, is all of this money completely lost? Thanks.

Yes.Until Exchange either side can withdraw. Or change their offer. For example a buyer can reduce his offer the day before exchange......

That's what 'Exchange of Contracts' means. Until then there is no contract. Just what some might term a 'gentleman's agreement'.

AlwaysWanderlusting

That's how I understand it.
As a buyer you may want to check any policies/clauses your conveyancing firm/solicitor has in place.  Mine has a 'no completion, no fee' clause which means that, in theory, I'd not have to pay legal fees if the sale isn't successful. However, I imagine I'd need to pay for any related work completed to date (and I wouldn't get any of the disbursements back).
I know you can get homebuyers insurance but it's usually only valid for very specific scenarios and like most insurance, I imagine there's plenty of ways for the insurer to get out of paying up. However, a friend of mine had it and it proved helpful when she was gazumped.