News & Insights

Issues that mean a conveyancing transaction falls through

Unfortunately, it is sometimes the case that a conveyancing transaction falls through, meaning you might not be able to buy your chosen property. We look at some of the main reasons conveyancing fails, and how to reduce the risk and prepare for a smooth move.

Conveyancing transactions are often part of a chain, with several buyers and sellers depending on each other. If one party pulls out, then the others in the chain will not be able to proceed. It is open to people to wait for the missing link to be filled, or alternatively, they may pull out entirely and look for a new buyer and/or seller.

Common reasons conveyancing does not go ahead

Problems revealed on the survey

If a survey reveals issues with a property, a buyer may pull out. Alternatively, there could be delays if they obtain quotes for the work and wish to renegotiate the price.

Problems with the legal title of the property

The due diligence process may reveal legal issues relating to the title of the property that need to be resolved before a purchase can proceed. If this requires input from third parties, for example, obtaining an easement giving someone the right to access a property, then this can be a lengthy process. Lenders have strict criteria and will not lend unless certain requirements are met.

Missing documentation

Documentation is often missing when a house sale takes place, for example, planning consents or building regulations approval relating to alterations or extensions. It can take time to obtain copies, and the delays can risk a transaction falling through.

A mortgage offer is not issued or is delayed

Waiting for mortgage offers is common in a chain, and if the wait is excessive, sellers may be concerned that no offer will be forthcoming. They could decide to pull out and look for a new buyer who is ready to proceed.

If you are thinking of buying a property with a mortgage, you can obtain a mortgage offer in principle, which will give you some idea of the amount you can borrow and whether your chosen lender will be prepared to offer you a mortgage. This can speed up the mortgage application process, particularly if you take the time to put all the necessary paperwork together in advance.

Gazumping and gazundering

A seller may pull out if they receive a higher offer from another potential buyer during the transaction. Similarly, a buyer may drop their offer right before the exchange of contracts in the hopes of securing a lower price, which is known as gazundering. Both endanger a transaction and mean that a chain may collapse.

Excessive delays

Conveyancing solicitors have a substantial amount of work to process, and if buyers or sellers do not instruct them early enough or work with them effectively to provide information when requested, it can cause delays.

It is important to speak to a solicitor early on when you decide to buy or sell, and they will assist you in getting off to a prompt start, including in dealing with legal requirements such as verifying your identity and source of funds, and putting the right paperwork in place if you will be receiving a gifted deposit.

An experienced conveyancer will be able to deal with any legal complications promptly, finding a solution that avoids hold-ups and reduces the risk of a chain collapsing.

Tips for a smooth transaction

Choose an experienced solicitor who will be able to handle difficulties effectively, and stay in touch with them and with your estate agent during the conveyancing process. It is often the case that, even if delays arise, an effective solicitor will be able to reassure other parties that these are being resolved. Using a less hands-on conveyancer can cause concerns. If the other parties feel that matters are not progressing and they do not receive updates, they may decide to cut their losses and pull out.

Try to provide information promptly when requested, and if you are buying a property, have your deposit in cleared funds ready to transfer when requested.

Make sure you have arrangements such as buildings insurance and removals in hand, so that these can be put in place as soon as the time comes.

For further advice or information please contact one of our Residential Property experts.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.