The first step in a property transaction is for an offer to be accepted. Whether you’re a buyer or a seller, the best case scenario is that things will go swimmingly from thereon. The process will be smooth and speedy, and contracts will be exchanged without any trouble.

However, anything can happen in the time following the initial acceptance of the offer.

It is possible for either party to come up against unforeseen circumstances. From bereavements to legal issues, employment changes and financial hardship – there are many problems that may make a transaction difficult, if not impossible.

So – is your offer legally binding once accepted? If not, when can you pull out of a house sale? In this article, any condition homebuyers Property Solvers answer these questions.

Buyers: Can You Withdraw an Offer on a House?

It is absolutely possible for you, as a buyer, to renege on your offer up until a certain point. What’s more, you are not legally obligated to give an explanation for this withdrawal.

However, the seller may want to know what went wrong – particularly as they’ll want to resolve any off-putting issues before attempting to sell again.

Of course, making an offer should not be considered a way of “reserving” a house while you make a decision. Out of courtesy to a seller, it’s best to be as certain as possible that you really want – and can afford – the property before making an offer.

There may also be practical reasons – such as the estate agent refusing a viewing or causing other problems – that have prompted the change of heart.

As soon as you come up against such potential issues, you should communicate your concerns to your estate agent or conveyancer. They will then notify the seller. Dropping out with no notice whatsoever can cause major problems for the other party.

House Buyers Can Sometimes Withdraw Their Offers

At What Point Can You Pull Out of a House Sale?

The answer to this question is the same for both buyers and sellers. When it comes to pulling out of a sale, the exchange of contracts or “settlement” represents the point of no return.

The matter is clear and totally inflexible.

Can you pull out of a house sale before exchange of contracts? Yes.

Can you pull out of a house sale after exchange of contracts? No.

The act of exchanging contracts represents a legally binding agreement, and, from that point on, you’ll be beholden to the contents of the documentation you have been given.

Remember, therefore, although you still may regret purchasing the house, you are obliged to complete.  Failing to do so would mean that you could lose at least 10% of the property’s value alongside certain legal or estate agency fees / charges.

If you do pull out before the exchange of contracts, you may still be liable for so-called “abortive fees”.

Can a Seller Pull out of a House Sale?

Again, a seller is well within their rights to change their mind about selling a property. This remains the case up to a particular time.

Reasons for this may be that:

  • They have had a change of heart and wish to stay
  • There is reason for them to suspect that their property was under priced
  • They’ve received a higher offer
  • The sale of their new home has fallen through

As mentioned before, it is common courtesy to let your buyer know as soon as it appears likely that you’ll have to call off the sale. They are likely to be selling a property themselves, and pulling out late in the day may leave them scrambling to find somewhere to live.

So – how late can you pull out of a house sale – either as a buyer or a seller?

What About Auction?

Property auctions are a very different matter. If you’re a buyer, it’s absolutely possible to withdraw a bid during an auction, but, if you’ve made the highest offer, you won’t be able to back out once bidding has ended.

The winning bid constitutes a legally binding exchange of contract, and the buyer must honour it (bar exceptional circumstances). The same goes for the seller. Once a property has been declared “sold”, the contract is complete.

Once the Hammer Falls With Traditional Auctions, Contracts Are Exchanged

Whether you’re buying or selling, if you’re taking part in a property transaction via an estate agent, you can drop out at any time before the exchange of contracts. If it’s an auction, you can’t drop out once yours has officially been declared the winning bid, or if a final bid has been accepted on your behalf as the seller.

You can avoid needless complications by taking great care when making or accepting an offer. The more certain you are when doing so – and the lower the potential risk level involved – the more likely you are to experience a smooth sale.

Property Solvers can help you sell your home without the risk of losing your buyer last minute. We can make a no obligation cash offer up front, and you won’t need to wait for weeks for the exchange of contracts. We can complete in as few as seven days, with no estate agent or legal fees involved.

For further information about our services, contact Property Solvers today. We’ll be very happy to assist you in any way we can.