Well, hopefully nothing! But to make sure you know every eventuality I have detailed the points below:
- Gazumping
- Formal mortgage loan offer too low
- Mortgage lender valuation too low
- Survey problems
- Mortgage rates going higher
- Chain falling through
- Search result issues
Can a seller back out of an accepted offer ?
Yes, they can – It is worth noting that nothing is 100% until it has legally completed at the keys are in your hand! Sales falling through every day and can be heart-wrenching! This could happen early with ‘gazumping’ and someone offers higher than you when they hear another offer has been accepted and a bidding war can start (if you can afford more – beware!)
Can a buyer back out of an accepted offer?
Yes, they can. This could be for a number of reasons as the process is lengthy and stressful with plenty of issues that can crop up – often entirely out of your control.
Offer accepted on a house, now what?
- Mortgage rates going higher
The economy is ever-changing. The economic climate and foreign affairs have a huge impact on what rates will be offered. If there is uncertainty or any turbulence in the financial market, mortgage companies will revoke their products without warning and can increase their interest rates much higher than when you first started your property search.
- Formal mortgage loan offer too low
The first big hurdle relates to the mortgage offer. You will have received a Decision in Principal but this is not a formal offer. The rates/costs may differ to what you initially expected for various reasons such as your commission being lower in recent months. This may mean you would have to put extra cash towards the purchase to cover the full cost.
Further funding issues include mortgage valuations and survey issues – these are two separate things and not to be confused.
- Mortgage lender valuation being too low
The mortgage lender will roughly value the property to ensure they are likely to get sufficient funds back should you not keep up with payments and they have to repossess to resell. This is not the same as a full survey to check for possible issues. Sometimes a lender can hold back X amount until certain work is completed such as roof repair.
- Survey Problems
There are two main types of surveys – Homebuyers report – usually under £1000 or a more detailed report is a full structural survey, these are more expensive and especially useful for older properties.
These are excellent for peace of mind and can bring up issues even an experienced developer may have missed. If the issues are major, you may want to rethink the purchase if it going to take up too much time and money but it may give some strength to the argument for a price reduction.
- Chain falling through
The reason why first-time buyers or those without a chain are favoured when a seller is decision-making is due to the risk involved. The more people, the more likely an issue will arise and a sale will fall through – therefore causing a delay to absolutely everyone involved. If the first person in the chain loses their job and the sale falls through, it’s back to the drawing board to find another buyer. Always ask the estate agent for information about the chain.
- Searches
Conveyancing solicitors will gain all information available on the property you are buying. This includes any issues relating to building control – have the owners done substandard work to the house without gaining building control sign-off or planning permission? Is there a planning application nearby for something that would disrupt your enjoyment of living there e.g. building a block of flats next door. The conveyancing process is complex and property solicitors cover many aspects where problems can arise but it is better to know prior to buying the property!
Let me know your thoughts! Have you found this helpful? Is there anything you would add to it?
Leave a comment below – Would love to hear from you!
Remember to seek professional advice at all key stages – this is just my opinion!