7 ways I've seen deals fall apart or falter in the last two months
It's a great moment when a selling agent phones you and tells you that your offer on a property has been accepted.
This is the call you've been hoping for and now you can breathe out.......or can you?
As anyone in the property business will tell you, getting to the "sale agreed" stage is definitely an important milestone, but by no means the finishing line.
Here are some ways I've seen property purchases/sales threatened or fall apart over the years
The vendor owed more to the bank on the property than they would make from the sale of the property. The vendor couldn't agree with the bank on how to deal with the residual debt so the bank would not release the title deeds of the property to the vendor. This meant the vendor could not go ahead to sell the title to the property to anyone else.
The property being sold was an executor sale eg. the person who owned it was deceased. When the buyer agreed to buy the property, probate had not yet been granted on the deceased person's estate. The probate process was proving to be so lengthy that the buyer's pulled out of the purchase.
The property being sold was at least 100 years old and turned out not to be a "free hold" property eg. the vendors did not own the ground the property was built on and were paying an annual fee to the owner of the free hold. This is not totally unusual in the case of old houses in itself was not a problem. The problem was that the leasehold only had 20 years left to run and a bank was not happy to give the buyer a mortgage on such a short leasehold. The vendors are now buying out the full freehold title to the property and will put it back on the market for sale.
The property being sold was structurally unsound in that the ground beneath it proved to be subsiding. The vendors needed to "underpin" the property properly at significant cost, before putting the property back on the market again.
The property, an apartment, was being sold with a car park space. When the solicitor acting for the purchaser went through the title deeds, they could find no evidence that the vendors actually owned the car park space that they were proposing to sell. The buyer's solicitor advised them to pull out of the deal.
The buyer's job is threatened eg. by COVID and the bank withdraws the buyer's loan approval.
The seller can't find a house that they want to buy and pulls out of the sale because they have no "exit plan" in place eg. no home to go to.
So I don't want to scare you but forewarned is forearmed and, as a buyer, it's no harm to know that these issues can arise. This knowledge will allow you to ask some useful questions about the status of the vendor of a house that you are seriously interested in.
That's all for today. With especially warm wishes to you all for a peaceful, healthy weekend. Take care in these challenging times.
