The reason why you decided to sell your house might have changed. In which case you may no longer wish to sell and have changed your mind.
So what happens when you change your mind about selling your house? You can changed your mind about selling your house if you do so before contracts are exchange. You need to let the estate agent know as soon as possible to avoid inconveniencing anyone, but you may still be in contract with the agent. If you change your mind after exchange of contracts you’ll be in breach of contract.
Can you change your mind when selling your home and what happens if you do?
Yes you can change your mind when selling your home, which is even the case if you’ve accepted an offer.
In England and Wales there’s nothing in law that can stop you from changing your mind and accepting a higher offer from someone else, or even to take your house off the market altogether.
But if you’ve already signed a contract with an estate agent and then changed your mind, you are still legally bound by that agreement until the time period in the agreement expires.
When should you tell the estate agent you changed your mind about selling your house?
There’s nothing wrong in changing your mind about selling your house, this happens all the time. But it’s common decency that you should tell your estate agent as soon as you’ve made that decision.
Otherwise you not only waste the estate agent’s time, but you will be putting people out who might be interested in buying your property.
You may have been selling your house for any number of reasons, and your reason may have changed. But don’t feel pressured into selling if you no longer wish to. Selling your home is stressful enough without going through it when you no longer want to.
However, expect to receive a less than happy response from the estate agent when you tell them. Estate agents are never happy when buyers or sellers pull out from buying or selling a property.
This is partly because they don’t get paid a penny for their time spent showing people around, liaising with solicitors etc. if the house sale doesn’t complete.
Additionally, the estate agent has the task of telling the other party to the sale. Your buyer won’t be happy to receive this type of phone call. This is because they will already have expended costs and wasted a whole load of time.
If on the other hand you are a buyer and have changed your mind, the agent will have to tell the sellers of the house. The sellers will be extremely disappointed and will have to start all over again.
Do I have to pay my estate agent if I pull out of a sale?
If you pull out of a sale you won’t have to pay your estate agent. This is because most, if not all, contracts with estate agents only require commission to be paid once the property sale has completed.
But if you change to another estate agent when the time period in the contract hasn’t expired, you’ll still be liable to pay their commission too.
What are the cost implications if you pull out of a house sale before exchange of contracts?
So long as you pull out of the sale of a house before contracts have been exchanged, the cost implications are relatively low.
For the seller the costs will be limited to any legal fees incurred up to the point of pulling out. Plus you will have paid out for an EPC (Energy Performance Certificate).
But for the buyer, the costs they will have incurred will be higher. But this will depend on how far away from exchange of contract when you change your mind.
If you are close to completion, the buyers costs will include their legal fees, the costs for the searches and the costs associated with a survey or valuation.
If you feel you have messed your buyer about with the sale of your house, you could offer to pay towards their costs. But you are not obliged to do so.
If you’re the seller you could end up with significant costs as a result of pulling out. But if you’re the buyer and you pull out, you could lose your deposit. Plus be liable for costs and penalties.
The party that pulls out from the sale could be liable for costs and penalties. This is even the case if the reason for backing out is beyond their control.
As a buyer, in addition to losing your deposit, having costs and penalties, you’ll also lose the money you’ve spent on surveys and valuations and your legal fees and search costs.
What percentage of house sales fall through?
Over one third of house sales fall through each year. According to research posted by Devon Live, 36%, or around 300,000 property transactions fall through.
According to Mortgage Finance Gazette 25% of house sales fell through in 2019. That’s a quarter of all house sales in England and Wales that fell through before completion.
The research was carried out by Quick Move Now and shows the following reasons for failed sales.
Why do house sales fall through?
The following reasons why house sales fell through and the percentage in the list below are for 2019.
34% of buyers changed their mind.
17% of buyers found difficulty in securing their mortgage.
15% pulled out due to the slow progress of the sale.
What percentage of house sales fall through after exchange?
Only a very small percentage of house sales fall through after exchange of contracts. The reason this is the case is due to the huge cost implications of not completing on the sale.
There are a number of things that can go wrong between exchange and completion. But no matter what the reason, either party would be in breach of contract, but for buyers they could lose the 10% deposit and be liable for costs and penalties.
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What Happens When You Change Your Mind About Selling Your House?
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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!
2 thoughts on “What Happens When You Change Your Mind About Selling Your House?”
Hello, I signed a contract to buy my first house, I closed my help to buy isa , I paid my level 3 suervy , paid searches pack , paid fee to my solicitor.
After all that the seller after signing the contract on 28/03/2021 today 4/05/2021 changes her mind , do I entitled to have my money wasted back or not
Would you help me please
Regards
Hello Ashaya, thank you for your comment and question. Firstly, my answer assumes you are either in England or Wales, but I also need to ask…you say the seller signed their contract on 28/3/2021, but did your solicitor exchange contracts with the seller’s solicitors? If the contract is only ‘signed’ and is still held by their solicitor (i.e. contracts were not exchanged), then there is not much you can do. But on the other hand if contracts were exchanged, then you do have recourse back to the seller. But you will need to speak with your solicitor on this to see what they have to say and what course of action you can take.
Hello, I signed a contract to buy my first house, I closed my help to buy isa , I paid my level 3 suervy , paid searches pack , paid fee to my solicitor.
After all that the seller after signing the contract on 28/03/2021 today 4/05/2021 changes her mind , do I entitled to have my money wasted back or not
Would you help me please
Regards
Hello Ashaya, thank you for your comment and question. Firstly, my answer assumes you are either in England or Wales, but I also need to ask…you say the seller signed their contract on 28/3/2021, but did your solicitor exchange contracts with the seller’s solicitors? If the contract is only ‘signed’ and is still held by their solicitor (i.e. contracts were not exchanged), then there is not much you can do. But on the other hand if contracts were exchanged, then you do have recourse back to the seller. But you will need to speak with your solicitor on this to see what they have to say and what course of action you can take.