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BUYERS RANG TO SAY THEY DON'T WANT MY HOUSE

Buyers have backed out of the agreement

Wednesday July 23,2008

By Annie Shaw

Q I recently agreed the sale of my property and have exchanged contracts.

I have just received a phonecall from my buyers to say they have seen a cheaper house for sale on my road and they want to back out of our agreement.

I have probably been a little foolish and let the exchange go through without insisting on a 10 per cent deposit.

A Michael White, property partner at Dawsons Solicitors, says: “Exchange of contracts legally binds both parties, and your buyers are not able to withdraw from the contract any more than you could if you had received a higher offer after exchange.

“As you now realise, payment of a 10 per cent deposit is the best form of security for the seller if the buyer defaults, as that deposit will be forfeit. Your solicitors should have advised you that it would be unwise (particularly in a falling market) to exchange without payment of a deposit.

“You do, however, have other legal rights, including a claim for interest on the price if the buyers fail to complete on the agreed date, and a claim for damages for breach of contract, in respect of any loss, in respect of a lower sale price and associated costs, on re-sale of the property.

“I doubt whether the buyers will want to risk being sued, and I would be surprised if they carry out their threat not to go ahead with the purchase when they have had the ramifications explained to them by their solicitors.”

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