You’ve sold your property subject to contact a while back and now it seems as though your buyers are dragging their feet.
So what should you do if your buyers are dragging their feet? If your buyers are dragging their feet give them an ultimatum to complete by a certain date or you’ll re-list the house. Get your estate agent or solicitor to find out why, as people don’t drag their feet unless something is wrong. This may be due to problems obtaining a mortgage or problems with their own house sale.
Once you know the problem that’s causing the delay, you are in a better position to act on the information. But it should be your estate agent that’s doing the chasing. They should be doing their job to keep the sale moving. After all it’s in their interest, as they won’t get paid if the sale doesn’t go through.
Where possible use your estate agent in preference to your solicitor to push the sale along as it won’t cost, whereas your solicitor will cost.
There are many reasons why buyers sometimes drag their feet. It’s unlikely to be deliberate and is more likely there’s a problem they have not disclosed. These include the following:
The buyers may have slow performing solicitors.
They may have problems obtaining their mortgage.
They may be having problems with the sale of their own house.
Your buyers have offers on multiple properties.
Your buyers may be getting cold feet.
1. The buyers may have slow performing solicitors
The ‘problem‘ of buyers dragging their feet may actually be down to their solicitor being slow. It’s entirely possible your buyers don’t know this either.
Unfortunately, solicitors often blame the other solicitor for their own misgivings. If you suspect this is down to your buyer’s solicitor, you need to speak with your solicitor or your estate agent to push the sale forward. Sometimes solicitors need a push to get your file to the top of the pile.
In a worst case scenario you may need to encourage your buyer to change solicitors.
2. Your buyers may have problems obtaining their mortgage
An as already mentioned, your buyers could be struggling to get their mortgage. An indication might be that if the valuation has already taken place and yet there are still delays. Get your estate agent to find out the problem, especially if it has been a few weeks since the surveyor visited your property for the valuation.
If a problem was picked up with the survey, like a damp issue, and this is what’s causing the delay, your estate agent would normally let you know. This is unless the problem is such that it has made your buyers rethink their purchase. But if this is the case you need to find out sooner rather than later.
However, if you know your buyers need a mortgage, and yet no survey has taken place yet, this is a tell-tale sign there is some other problem. Again, get your estate agent to push your buyers for information.
3. Your buyers may be having problems with the sale of their own house
Your buyers are probably in a conveyancing chain and are reliant on their house sale in order to buy yours. If this is the case and their sale is taking time or if their sale has fallen through, you need to know as soon as possible.
Often times buyers are reluctant to tell the vendors of the house they are buying if their own sale has fallen through. Sometimes they hope to find another buyer and it may be this is what’s causing the dragging of their feet. Get your estate agent to make enquiries about what’s causing the delay.
4. Your buyers have offers on multiple properties
It possible your buyers have more than one offer in place. This is normally brought out into the open when the house sale moves onto the conveyancing stage. It’s at this stage when the buyer needs to begin committing funds to engage solicitors in the purchase.
It’s unlikely that a buyer would commit to two sets of conveyancing solicitors on two properties unless they are investment purchases. But it’s possible and can happen.
It’s very unlikely they will have multiple mortgage applications in process unless they are investors. It’s important to flush this problem out sooner rather than later to avoid them pulling out just before exchange of contracts because they decide to go with the other property.
5. Your buyers may be getting cold feet
Your buyers may also be getting cold feet about the commitment to buy your house. Are your buyers having second thoughts and getting what’s effectively buyer’s remorse before they buy.
It could be the buyer is trying to find something wrong with your house to help them with their pre-buyer nerves or fear. This can manifest when you find your buyers are carrying out what appears to be too many checks.
Never under estimate that buying a house is a big deal and a big purchase for most people. It may even be your buyer’s first home purchase if they are first time buyers.
What is the best way to push buyers who are dragging their feet?
Give your buyers an ultimatum to exchange by a certain date or else you’ll put the house back on the market.
Offer an exchange with a long-stop date or delayed completion.
1. Give your buyers an ultimatum to exchange by a certain date or else you’ll put the house back on the market
The best way to push your buyers into action if they are dragging their feet is to give them an ultimatum. The type of ultimatum that works best is to give them a deadline by which exchange must take place.
The ultimatum should say that if exchange is not met by the date, you will put the property back on the market.
There’s nothing like a deadline to give people a focus and a fear of loss. This will normally bring out the truth of what’s wrong. This may backfire and you may lose the sale, but the truth of the matter is if your buyers truly want your property they will act accordingly.
The advantage to you of laying down an ultimatum is how this will flush out each of the above reasons.
These are as follows:
Slow performing solicitors: If your buyer’s solicitor is slow they may be slow to respond on this type of ultimatum in any case. But if you also involve your estate agent, they will speak directly to your buyers. This should prompt them to speak to their own solicitor, which may flush out the real underlying problem.
Problems obtaining finance: If your buyer’s are struggling with their finance, they won’t commit to an exchange of contracts. This is likely to get them to fess up to why they can’t commit to an exchange date.
Problems with their own house sale: If your buyer’s house sale has fallen through they won’t be able to commit to an exchange date. They will either have to pull out of the purchase or ask for more time.
Offers on multiple properties: Giving a buyer an ultimatum when they have offers on multiple properties will force them to make a decision. Do they like your property enough to proceed or not?
Buyers have cold feet: A short sharp shock of an ultimatum may be what’s needed to jolt buyers with cold feet to make a decision one way or another.
However, if it’s a buyers market you may struggle to use this ploy. The buyers may call your bluff and know there won’t be many other buyers queuing up to buy your house.
2. Offer a small discount to encourage your buyers to complete by a fixed date
Offering a discount to the buyers for them to complete by a certain date may be enough to encourage them to stop dragging their feet. It will also help you to find what the problem is that’s causing them to drag their feet.
3. Offer an exchange with a long-stop date or a delayed completion
The good thing about offering an exchange of contracts with a delayed completion is that if your buyers accept this option you have your sale contracted and it can’t then fall through.
However, this strategy does require the whole conveyancing chain to agree to the same terms, which may not be possible. But offering this in the first place does have the tendency to flush out any finance problems.
Buyers will not commit to any form of exchange, even one with a longstop date, if they don’t have finance in place. Certainly their solicitor will be advising them against doing so.
To conclude this article, one way to avoid the stress of buyers dragging their feet is to sell your current house and rent before buying again. By doing so you are splitting your move into two separate steps.
If you only have to focus on the sale of your house, you are not stressing about any buyer delays and how this impacts on your ongoing purchase.
Video on what to do if your buyers are dragging their feet:
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Are Your Buyers Dragging Their Feet? (How To Get Your Sale Moving Again)
Article written by Russell Bowyer who has been investing in property since purchasing his first commercial property in the 1990's for his own Chartered Accountancy business. But his first property investment project was to turn an old dilapidated restaurant into a large 5-bed home, which he purchased for £117,500 and sold for £450,000 (to see an "after" photo of the house before it was sold see here: About). Russell owns a number of investment properties, which includes houses, flats and HMO's. More recently he has turned his creative side to investing in property using lease options. His largest lease option deal to date was to acquire 12 properties worth over £2 million for just £12, which means he paid just £1 to acquire each property!
