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Home-Buying Tips: What To Do When Your Offer Gets Rejected

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By : Brazg Gavin    99 or more times read
It can be a distressing moment to lose the house you have set your heart on, not just because you have already envisaged your new life there, but because you may lose money if you have already retained the services of a conveyancing solicitor and surveyor.

So what do you do if the chain breaks on you? Or, indeed, you break the chain?

The first major problem could be your mortgage lender refusing your funds, which is why you should always ensure that you have a provisional offer before you even start looking for that dream home.

It is a good idea to find out exactly why your lender has refused to offer you a mortgage, If you are using a broker, they'll recommend your next course of action. If you are dealing directly with the lender, it may be tougher to determine, so you won't know which lenders will be more sympathetic next time around. Unfortunately, the more failed applications you make, the worse your credit file will appear as these appear as 'hard' footprints and leave a trail for other lenders. If you keep getting gazumped - the unscrupulous practice of a seller accepting a higher offer even after they have accepted yours - then try talking to the estate agent to find out what motivates the house seller.

Usually it's money, so increasing your offer may be the answer. But if you're chain-free and/or a cash purchaser, you could have a great advantage over the competing buyer as the vendor may just want to move quickly.

To avoid being gazumped in the first place, some advice. Give a deposit with a lockout agreement. That literally stops the vendor from even glancing at other interested buyers for an agreed period of time once they have accepted your offer. Take advice from your conveyancing solicitor, they may well be able to assist with your lockout agreement.

Negotiating is an art form and should be undertaken with as much information as is possible.

Knowing what will tempt the vendor - whether it's a certain price or being able to complete within a certain timeframe - is a useful start. Always confer with your conveyancing lawyer that the timescale you have offered is realistic. Also be sure to have done your research about what is selling locally and how high a demand there is for the type of property you are after.

Now that the power balance is shifting in favour of buyers again, with prices falling and vendors becoming more vulnerable, there is less chance of the buying process going to sealed bids. But if that happens with the property you are chasing, decide the maximum amount you are prepared to pay, stay with it, and don't look back if you lose out. Make it known when you place your bid if you have nothing to sell or are flexible over completion dates and provide details of your solicitor and mortgage lender's provisional offer.

A number of chains collapse just because someone gets cold feet and changes their mind, keep in regular contact with your conveyancing solicitor and the estate agent to keep the whole transaction moving forward as quickly and smoothly as possible. But until contracts have been exchanged with the seller, nothing is certain - the buyer or the vendor can walk away from a deal until that time without any legal recourse. Any payments made up to this point - on searches, legal or survey fees, or a deposit in the case of new builds - are at the buyer's risk.

If your vendor changes their mind and decides not to sell to you, enquire as to why this may be. If the reason is cash, consider if the extra required is worth it, it may be that by paying more you can seal the deal. If the property they are buying has fallen through, perhaps they can move and rent while they start to search for an alternative property. Perhaps, if not time critical you can wait for them to locate a new property?

Reading the results of the survey on your prospective purchase can be another make or break moment. No property looks like the bargain of the millennium once you have ploughed through pages of issues, but subsidence is the only one you really should worry about.

Focus on the summary at the end of the surveyor's report to see what needs doing and how much it might cost, either decide it's excessive and pull out of the purchase or get the seller to pay for as much as possible before they leave. There is no reason why that should be your responsibility.

It pays to assess the property with that report in your hand. Often the faults described in surveyor's prose can seem more daunting than the reality. Don't panic. Just look at the property again and then talk about it.

Ultimately, though, if your purchase falls through, there is always another, probably better, property just around the corner. Spanning a lifetime, there will be numerous properties you loved and lost - and never thought of again.
Gavin Brazg is editor of TheAdvisory - UK's largest free resource of free expert advice for property sellers.

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