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Solicitor Fees When a Buyer or Seller Pulls Out

Nicola Ryan

Written by

21st Oct 2022 (Last updated on 26th Oct 2022) 12 minute read

Buyers and sellers must pay various solicitor fees when undergoing a property transaction. These payments include legal fees, searches, and disbursements. A general rule of thumb is that the further along in the process you are, the more fees you will be likely to pay.

In this guide, we’ll be taking you through the solicitor fees that you are expected to pay when a buyer or seller pulls out of a house sale.

This article will cover the following:
  1. Why Would a Sale Fall Through?
  2. Why Do Buyers Pull Out?
  3. Why Do Sellers Pull Out?
  4. Who Pays Solicitor Fees When a Buyer Pulls Out?
  5. What Happens if a Sale Falls Through Before the Exchange of Contracts?
  6. What Happens if a Sale Falls Through Before Completion?
  7. What Should I Do if My Buyer Pulls Out?
  8. What Should I Do If My Seller Pulls Out?
  9. What to Do When the Seller Pulls Out Before Contracts Are Exchanged
  10. What to Do When the Seller Pulls Out After Contracts Are Exchanged
  11. Finding a Conveyancer
Solicitor Fees When a Buyer or Seller Pulls Out

Here are the average legal fees based on the average house price of £277,000:

Property TypeAverage Cost (£)
Selling a property legal fees
£1,345
Buying a property legal fees
£1,405
Conveyancing searches
£290
Anti-money laundering checks
£5
Bank transfer fee
£40
Total fees for selling a property
£1,680
Total fees for buying a property
£1,740


Why Would a Sale Fall Through?

There are many reasons why a sale can fall through before or after the exchange of contracts. The buyer or seller may simply change their mind and wish not to proceed with the sale. However, there are many other reasons that can factor into a failed sale. Here are just a few:

  • The buyer’s mortgage provider may have determined a lower value on your property
  • Gazumping
  • Negative survey results
  • Issues during the conveyancing process

These are just a few of the reasons why a sale can fall through. Depending on how far along you are in the process, there may be costs, even if you are not the party who withdrew.

Why Do Buyers Pull Out?

If your buyer has pulled out of the transaction, this can cause all sorts of problems, especially if you have a property lined up to purchase yourself. If this happens to you, evaluate why your buyer has pulled out. This can help you to avoid facing a similar situation in the future. Here are some of the most common reasons why buyers pull out:

Change of Heart

Buyers sometimes have a change of heart when it comes to the property. This can be influenced by market conditions or simply finding another property that suits their criteria better. An efficient conveyancing process with minimal delay is best as it prevents your buyer from being put off and ensures the sale goes smoothly.

Gazumping

Gazumping is when a seller accepts another offer from a second buyer after accepting an initial offer from their first buyer. This tends to happen if the second buyer is offering a higher amount. Some sellers then use the gazumping as an opportunity to increase their house price in the hope that the first buyer will outbid the second. However, this can turn buyers off and they will then pull out of the transaction.

Gazumping is a huge problem, especially for those who are part of a property chain. Buyers in this situation may feel under a lot of pressure to up their offer if they have been gazumped. This is why it is best for buyers to have some backup properties just in case this happens.

Negative Survey Results

Lastly, gazundering can happen as a result of negative survey results. The survey report is one of the most important aspects of the process as it will highlight any defects or issues with the property. There may be defects pointed out in the survey that you are not aware of.

Most survey reports come with recommendations for maintenance and cost estimates. While some issues may not faze your buyer, they may use it as an opportunity to renegotiate their offer. Other buyers may not want to deal with the defects and pull out of the sale completely.

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Why Do Sellers Pull Out?

There are also instances when a seller pulls out of a transaction. Again, this can be for a variety of reasons and can cause issues for buyers who are part of a property chain. Sellers who pull out after the contract exchange are liable to pay high fees as the house sale is legally binding at this point. Here are some of the reasons why sellers pull out:

Change of Heart

Just like buyers, sellers may also have a change of heart. Sellers who have lived in their property for a long time may feel sentimental and regret putting their house on the market. If you are seller, really think through why you want to move home and make sure that it is definitely what you want to do.

Gazundering

There is also a chance that gazundering may cause the sale to fall through. This is when the buyer drops their offer at the last minute, putting pressure on the seller to accept. While this can be an effective technique, it can cause the transaction to fall through. Gazundering is a gamble as sometimes it may work and sometimes it might not.

Therefore, there are certain ways that you can ensure that you don’t fall victim to gazundering. These include:

  • Setting a fair price: while it may be tempting to put your house on the market at a higher price point, this can actually hinder the sale. Your buyer may have found an alternate property at a lower price or received negative survey results. They can then use this as an opportunity to lower their offer. Therefore, setting a fair price can prevent this from happening.
  • Planning a limit: if you plan a limit in advance, this will prepare you in case of gazundering. Knowing the lowest amount you are willing to accept in advance will give you a better understanding of your financial situation. It will also mean that you won’t feel pressure from the buyer.
  • Be honest: lastly, being honest about any defects or issues in the property will help to prevent gazundering. Any defects can be spotted during the survey and conveyancing process. Therefore, it’s best to either fix the issue beforehand or be honest with prospective buyers.

Market Conditions

Lastly, sellers may withdraw from the sale if the market takes a downward turn. The property market fluctuates constantly and there are good times and bad times to sell. Therefore, if house prices start to dip, sellers may be reluctant to sell as they may not receive the offer they want.

Who Pays Solicitor Fees When a Buyer Pulls Out?

If your buyer has pulled out, you may still have to pay your legal fees. If your solicitor has a No Sale No Fee policy, you may not have to pay their legal fees, but this is dependent on when the buyer pulls out.

If your solicitor does not have a No Sale No Fee policy, then it is likely that you will not be able to claim the money back.

Here are the average legal fees based on the average house price of £277,000:

Property TypeAverage Cost (£)
Selling a property legal fees£1,345
Buying a property legal fees
£1,405
Conveyancing searches
£290
Anti-money laundering checks
£5
Bank transfer fee
£40
Total fees for selling a property
£1,680
Total fees for buying a property
£1,740

How much you will actually end up paying is dependent on how far along you are in the process and your solicitor’s hourly rate.

If you are a buyer and your seller pulls out, you may also have to pay for disbursements and conveyancing searches if these have been conducted. On average, conveyancing searches cost £290.

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What Happens if a Sale Falls Through Before the Exchange of Contracts?

Either side can pull out of the transaction before the exchange of contracts without any legal repercussions. Depending on how far along the process the transaction was, you may be able to request the other party cover your fees.

You will need to check over the agreements that you have signed with your estate agent. This is because there may be clauses that prevent you from withdrawing from the transaction without penalties. This includes paying the agent’s fee.

You will also need to check the contracts that you signed with your conveyancer in case you have to pay any outstanding fees with them.

Other costs that you may have to pay include legal fees, disbursements, and searches. Again, this depends on how far along the process you are.

What Happens if a Sale Falls Through Before Completion?

If the contracts have been exchanged, this can cause problems if the sale falls through before completion day. This is because both sides are legally bound to the transaction once the exchange of contracts has happened. If one side pulls out of the transaction, financial penalties can be incurred.

If a buyer pulls out of the sale before completion, the seller is entitled to keep the deposit. On top of this, the seller is also entitled to sue for extra costs such as legal fees and disbursements. This is especially the case if this has impacted the value of the home.

If the seller withdraws from the sale, they will have to pay the buyer their deposit plus interest. The buyer can also request that the seller covers their legal fees and disbursement costs.

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What Should I Do if My Buyer Pulls Out?

If your buyer pulls out of the transaction, there are options that you can take. It’s important to be prepared in case your buyer does pull out, especially if they do so before the exchange of contracts.

Don’t rush the sale

Not rushing the sale is the most important thing to keep in mind. A lot of sellers feel the pressure from the monetary loss and drop their asking price. However, you can keep your asking price in the hopes that another buyer will purchase the property.

Asking for proof of finance

To avoid future buyers from pulling out of the sale, you can request proof of finances earlier in the process. This can include bank statements and a mortgage agreement in principle. You can also request a non-refundable deposit from future buyers to ensure that they are serious about the purchase.

Complete your own survey

You can also have your own survey completed. This is a good idea if your buyer has pulled out due to negative survey results. Having your own survey conducted will detect any issues and you can decide to fix these problems or reduce your asking price accordingly.

What Should I Do If My Seller Pulls Out?

When a seller pulls out of a transaction, it can cause a lot of inconveniences, especially if you are far along in the conveyancing process. There are many reasons why sellers withdraw from the transaction. There are options buyers can choose from in a bid to get their dream home or receive compensation.

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What to Do When the Seller Pulls Out Before Contracts Are Exchanged

A property transaction is only legally binding if the exchange of contracts has not occurred. This means that the buyer or seller can withdraw from the transaction without any legal repercussions.

However, if your seller has pulled out of the transaction before the exchange of contracts, there are some options you can consider.

Higher offer

Your seller may have pulled out as they have received a higher offer from a second buyer. If this has happened, you can choose to make an offer. However, make sure that you are able to afford the extra cost and check with your mortgage provider that you are able to increase your amount. Another thing to bear in mind is that your offer should not exceed the value of the house. If it does, this can put you into negative equity which can badly affect your credit score and mean that you are paying more money than the house is worth.

Compensation

While your seller has not broken any laws by pulling out before the exchange of contracts, you can request financial compensation. This is because you may have lost money depending on how far along the process you were. Some sellers may cover the buyer’s fees. However, if your seller refuses to offer you compensation, you will not be able to pursue it legally.

Have a back-up

When buying a property, it’s best to have some backup options just in case your seller pulls out. This is especially important if you have to leave your current property by a certain date. While this may be highly inconvenient and an alternate property is not what you hoped for, it can be a huge help in this instance.

What to Do When the Seller Pulls Out After Contracts Are Exchanged

If the contracts have been exchanged, pulling out of the transaction can be more complicated. This is because pulling out of the transaction after the exchange of contracts means that the contract has been breached. Therefore, this means that there are likely to be financial penalties and it can take some time to withdraw from the sale.

If you are a buyer and your seller has withdrawn from the transaction, there are multiple options you can choose from. This is dependent on what outcome you want.

Notice to Complete

The first thing you can do is issue a Notice to Complete the seller. This is a legal document that gives the seller 10 days to complete the sale. In the meantime, you are allowed to claim a daily interest rate until the transaction is completed. If the seller still decides not to go ahead with the sale after 10 days, you have a right to sue the seller. This is due to a breach of contract and you can claim any money that has been lost during the process.

Higher offer

Some sellers may proceed with the sale if they are offered a higher price. This can be a risky option as it depends on the property value and how much your mortgage lender has agreed to lend you. Always make sure that you can afford the extra cost if you are considering putting in a higher offer.

Ask them to pay for the survey

Lastly, if your seller is adamant that they wish to withdraw, you can request that they pay for your survey. This can alleviate your financial losses that have been made throughout the conveyancing process.

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Finding a Conveyancer

At Compare My Move, we can connect you with up to 5 licensed conveyancers. You can compare quotes and save money on your conveyancing fees.

Nicola Ryan

Written by Nicola Ryan

Nicola focusses on all things moving house at Compare My Move where she writes articles for the advice centre, guiding users through everything they need to know about moving house.

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