Why do house sales fall though…and how to avoid it happening? (Part 1)

As mentioned in the previous blog Lucky to be buying & selling property in Scotland, we are quite lucky here that once the deal has been struck and formalised (with missives concluded), a legal contract has been agreed and only in exceptional circumstances will a sale that has reached this point not conclude.

However, prior to the missives being concluded (which is often timed to be just before the date of entry anyway) there remains the chance that a sale will not go through to completion and, although the potential reasons are innumerable, we’ll look at some of the more common reasons for this, in the hope that they can be avoided.

Of course, the longer a sale takes to progress, the higher the chance that one (or more!) of these issues may occur and so one of the best ways to ensure that a sale does go through is to eliminate any unnecessary delays in the transaction. Equip yourself with a reputable and reliable Solicitor who, whilst also being meticulous and thorough, can act swiftly on your behalf.

Boundary and Title Disputes.
Most people don’t look at, or even think about, the title to their property for the duration that they live there, simply as there is rarely any need to. Fences, walls, hedges etc are generally accepted as the threshold to a persons property (whether the correct boundary or not!) and are rarely questioned. However, come sale time, it is vitally important that all boundaries are correctly identified and demarked, and this is particularly relevant now that the Registers of Scotland have adopted a map based system for recording titles.
Whilst the new system is far more accurate, a property is generally only recorded on the new system when a sale is effected, and it is therefore likely that any property being sold currently will be recorded on the new system for the first time.
What this means in the short-term is that the conveyancing process will be more complex and may take longer and, if possible, a vendor might consider speaking to his/her solicitor to discuss the property title prior to putting a property for sale, and ensuring the actual boundary is where the owner, and all surrounding neighbours, think it is. Time spent on this prior to the house going on sale may well reduce the time taken for the conveyancing process later and, as we’ve already noted, the chance of a sale falling through will increase the longer the transaction takes.

Financing
Whilst a buyer is likely to have enquired about the level of financing he/she can obtain before property hunting, a formal offer of a mortgage will only usually be made on a specific property once the buyer has finally chosen a property he/she wishes to buy, which is why many offers made in Scotland are made ‘subject to finance’. The buyer’s Solicitor should be establishing their client’s wherewithal to complete the purchase, however the Lender themselves will of course be making the offer subject to conditions, and if these conditions aren’t satisfied – for example a survey highlighting issues with the property – then the finance may never materialise, leaving the buyer (and seller) without a sale.
This is a difficult one for the seller to avoid, as the buyer’s financial position is obviously beyond the seller’s control, however a seller should always view offers as an entire package, and not necessarily go for the highest offer made. For example, a £1,000 difference in offer could easily be overshadowed by extra mortgage payments as a result of a sale falling through.
“A bird in the hand is worth two in the bush” as the old saying goes!

In Part 2 of this Blog, we’ll look at some other common reasons for sales not reaching completion (some easier to avoid than others!)