What will happen if you fail to exchange on a house purchase?
Help! We have failed to exchange. What happens next? Will we lose the house we are buying?
Don’t panic. There are many reasons for buyers and sellers to fail to exchange contracts. One party may not be entirely satisfied with all of the information received raising further questions, there might be delays in waiting on search or survey results, or a buyer may not yet be in a position to complete. A chain could further complicate and delay the process.
Exchange is just one milestone in the journey to purchasing your new home and can happen at any time – even minutes before the all-important completion.
But won’t we lose the home of our dreams?
Not necessarily so. Communication is key to understanding the reasons for the delay in exchanging contracts. Unless agreed with all parties at the outset and you have paid an initial reservation deposit, most missed deadlines do not immediately result in a seller withdrawing contracts.
It can help to understand why the seller needs to sell within a certain period, and ask yourself whether the seller’s aim is to restart the process with a new buyer or wait a few weeks to exchange with you? The latter is the likely answer.
So why do buyers often fail to exchange contracts?
There are many reasons. A seller’s circumstances might change, or they may have second thoughts about the sale. It may be a result of one party being on holiday, delays in a longer chain, or your solicitor waiting on missing information. Often, unrealistic deadlines are agreed between the buyer and seller without respective solicitors being told.
Delays to exchange are common, but the real reason a sale or purchase will collapse is due to a failure to complete.
So, we could lose the house of our dreams?
Failure to complete is more serious and could incur a buyer and seller financial penalties. There will be circumstances completely out of everyone’s control – such as a failing in bank payment technology. But again, communication is key to ensuring the purchase gets across the line. Your solicitor should do everything humanly possible to make sure you complete.