What happens if a house sale falls through?

If a house sale falls through before contracts are exchanged, either side can walk away without a legal penalty in England and Wales, and each pays their own costs so far. After exchange, the sale is legally binding, so a buyer who pulls out usually loses their deposit and can be sued for your losses. Sales are most at risk before exchange, so the practical steps are: find out why, keep your costs down, get back on the market quickly, and make the next sale harder to knock over.

It's a horrible moment, especially if you've already planned your move. The good news is that the work done so far usually isn't wasted.

Can a buyer pull out before exchange?

Yes. GOV.UK says an offer isn't legally binding in England and Wales until contracts are exchanged, and your property isn't legally sold until then. The law says a contract to sell land must be in writing and signed by both sides, so an accepted offer, a memorandum of sale or an email from the agent isn't a binding contract.

That cuts both ways. Until exchange, you can also accept a higher offer or withdraw, though that may leave you with costs and your buyer with losses. In June 2026 the government said around one in three sales fall through, costing sellers around £400 million a year.

Why do house sales fall through?

• The buyer's mortgage. The lender turns them down, or lends less after valuing the home below the agreed price (a "down valuation"). A mortgage valuation is done for the lender's benefit, not the buyer's.
• Survey problems. The buyer's survey finds damp, structural issues or other defects, and they pull out or try to renegotiate.
• The chain. Someone else in the chain fails to sell or buy, and every linked sale stalls. See what is a property chain.
• The buyer changes their mind, finds another home, or their circumstances change.
• Legal problems, such as missing planning permission or building regulations approval, title issues, or slow leasehold information.
• Gazumping or gazundering. The seller accepts a higher offer, or the buyer cuts their offer just before exchange. Both are possible before exchange because nothing is binding yet. See gazumping and gazundering.
• Long delays, for example in probate sales or long chains, until someone gives up.

Who pays what if a sale falls through?

Before exchange, there's normally no compensation either way, and each side bears its own costs.

Cost	Who normally pays	Notes
Your solicitor's work so far	You	Unless you agreed a "no sale, no fee" deal, so check your terms
Estate agent's commission	Usually nothing yet	Commission is normally due once contracts are exchanged, but check for withdrawal fees or a "ready, willing and able purchaser" clause
Your EPC	You, already paid	It lasts 10 years, so you can use it again
Buyer's searches, survey and mortgage fees	The buyer	Not your cost
Buyer's solicitor	The buyer	Not your cost

Watch for "ready, willing and able purchaser" clauses. If your agent's contract uses this term, you may owe commission once the agent introduces a buyer who is prepared and able to exchange unconditional contracts, even if you then withdraw from the sale yourself.

What if the buyer pulls out after exchange?

After exchange, both sides are legally bound. GOV.UK says neither side can usually pull out without paying compensation, and a buyer who withdraws may lose their deposit. The deposit is usually 10% of the price.

If the buyer doesn't complete on the agreed date, your solicitor can serve a notice to complete, which gives them a short, fixed time to finish the purchase. If they still don't, your solicitor will advise on your options, which can include keeping the deposit, selling to someone else and claiming for your losses.

What if you need to pull out?

Before exchange you can, but you'll pay your own solicitor for the work done, and possibly your agent if your contract says so. After exchange, pulling out is a breach of contract and the buyer can claim compensation. If your own purchase has collapsed and you're tempted to pull out of your sale, talk to your solicitor before you decide anything.

What to do next: a checklist

1. Find out exactly why it fell through. Ask your agent and solicitor. If it was a survey or a down valuation, ask for the details.
2. Relaunch straight away, and ask your agent about earlier viewers and offers. Agents must pass on all offers until contracts are exchanged.
3. Look again at the price if the buyer's survey or the lender's valuation came in low. The next buyer's lender may well say the same.
4. Deal with any problem the survey found. Get a quote or a specialist report you can show the next buyer.
5. Keep your legal work moving. Your title, forms and any leasehold information can usually be used for the next buyer.
6. Talk to the seller of the home you're buying, if you're in a chain. They may wait, or you may need to think about renting, a bridging loan or letting that purchase go.
7. Check your costs. Ask your solicitor for a bill to date, and reread your agent's contract.

How to cut the risk of your next sale falling through

• Check the buyer before you accept. Your agent should find out how the buyer is paying for the home and tell you. Ask for a mortgage agreement in principle, proof of cash, and details of any sale they're relying on. See how to accept an offer on a house.
• Favour a short chain, or no chain, when you're choosing between similar offers.
• Get your legal work ready early. Instruct your solicitor when you put the house on the market and fill in the Property Information Form (TA6) straight away. For a leasehold flat, order the management information early.
• Be upfront about problems. Buyers who learn about issues late are the ones most likely to pull out.
• Price realistically, so the buyer's lender values the home at the agreed price.
• Agree a timetable with the buyer, and keep in touch weekly.
• Consider a reservation agreement. GOV.UK says one can commit the buyer and may include compensation if they pull out. They're voluntary, so take legal advice on the terms.

Early signs that a sale is in trouble

It's worth watching for problems early, while there's still time to fix them or line up another buyer. Ask your agent or solicitor to look into it if:

• the buyer hasn't instructed a solicitor within a few days of you accepting their offer (GOV.UK suggests checking this)
• the buyer's survey or mortgage valuation hasn't been booked
• their mortgage offer is taking much longer than expected
• their own sale has stalled, or someone else in the chain has gone quiet
• the buyer or their solicitor stops replying

Should you keep marketing after accepting an offer?

It's your choice. GOV.UK's guide to selling suggests taking your home off the market once you accept an offer. If you'd rather keep it on, agents who belong to The Property Ombudsman must take your instructions, tell your buyer in writing, and make clear in their marketing that an offer has been accepted. Either way, agents must pass on any new offers until exchange. Staying on the market can give you a back-up buyer, but some buyers find it unsettling, so weigh up which matters more to you.

Will the rules change?

In June 2026 the government published a roadmap for reforming home buying and selling. It plans to require sales packs with key information, including searches, before homes are listed, and binding conditional contracts much earlier in the process, with penalties for anyone who causes a sale to collapse without good reason. These need new laws, which the government says it will bring in when parliamentary time allows. For now, a sale in England and Wales still isn't binding until exchange.

When a chain-free cash sale makes sense

If you've been let down once and need certainty, selling to a cash buyer removes the mortgage and chain risks. We buy homes with our own money, so there's no mortgage or chain, we make an offer within 24 hours, and we pay your legal fees. The trade-off is price: our offer is below market value. If your home is in good condition and you have time, relaunching on the open market will usually get you more.