Do Solicitors Charge if a House Sale Falls Through?

Buying or selling a home is meant to be an exciting time – the start of a new chapter! But unfortunately it’s a process that can be fraught with setbacks and disappointments too.

In fact, research by Which.co.uk shows that as many as 30% of home sales fall through for one reason or another, with around two thirds of these caused by the buyer pulling out.

It’s not just the disappointment to worry about though. Having a sale collapse can be expensive too. One of the major costs can be legal fees.

If this has happened to you (or you're worried about chain sales in general), this free quiz might be for you...

You can avoid further stress, delays and disappointment and get your house sale back on track in as little as 48 hours by selling to a genuine house buying company. Take our free quiz to find out if a house buying company is the right option for you. If it is, I can introduce you to the company I know and trust who’ll be able to help.

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1. Do solicitors charge if a house sale falls through?

Some solicitors will charge if your house sale or purchase falls through, whereas some won’t. It depends on whether or not they’re a “no sale, no fee” solicitor. Be sure to ask this question in advance so you know what you’ll be liable for if the sale collapses.

If they aren’t “no sale, no fee”, then the amount you have to pay will vary depending on each solicitor’s T&Cs. It may be a fixed percentage of the overall fee, or an hourly rate for work done.

In the Which survey, 84% of survey respondents lost money when their sale fell through. The average amount they lost was £2,899 – so it can be serious money.

Bear in mind too that even if you have a “no sale, no fee” solicitor, you will still have to pay for any “disbursements”. These are external costs that your legal team have had to pay out. Unfortunately you’ll need to cover these regardless of whether or not your sale completes. More on these later.

2. Why do solicitors charge if the sale does not go through?

A good solicitor or conveyancing company will start work on your property sale as soon as you engage them, in order to move the sale along and complete the process as quickly as possible for you.

The more complicated your sale, the more work there will be for them to do. (For example, properties with complicated legal titles or other issues often entail more legal work).

Naturally, your legal representatives will want to be paid for their work, even if you do not go through with the sale or your buyer pulls out.

Related: What Percentage of House Sales Fall Through? [2022 Survey]

3. Will I still have to pay something if I have a "no sale, no fee" solicitor?

Many solicitors and conveyancing companies offer a no sale-no fee agreement, meaning there are no fees charged for their time if your sale does not complete.

However, it is important to understand that you will probably still have a bill to pay even if your sale does not go through. This is because your solicitor has to pay a number of different external costs for things like searches, legal documents and identity checks.

These costs are called disbursements, and ultimately you'll need to cover them.

Some of the disbursements are for very small amounts (£5 or £10 here and there), whereas others can be for hundreds of pounds.

Unfortunately, the disbursements a buyer will have to cover are usually much more expensive than the seller’s ones.

3.2. Types of disbursements you may have to pay

There are different disbursements you face depending on whether you're a buyer or a seller.

Disbursements buyers and sellers both pay

These are typically pretty minor disbursements that you'll have to pay regardless of whether you're buying or selling a property.

• Land registry fees to download property documents (typically £5-£10)
• Identity checks for money laundering regulations (around £10 per person)
• Bankruptcy checks (Typically around £5)

Disbursements only buyers pay

Unfortunately buyers are usually the ones who end up with the raw deal (i.e. the most in cancellation costs). This is because they pay for the searches:

• Search fees to the local authority and utility providers (typically around £300 but can be more)

For example, here’s a disbursements bill I received on a recent purchase that had fallen through:

Note that when selling your house by auction, the seller is actually the one who pays for searches as part of the legal pack, not the buyer.

Related: 17 Benefits Of Selling Your House At Auction

Disbursements only sellers pay

Thankfully this one only applies to leasehold properties:

• Management packs for leasehold properties (Typically around £250)

Other disbursements (ones paid on completion)

There are actually more types of disbursements than the ones I’ve listed above, but they’re paid on completion. Obviously this means you won’t actually have to worry about paying them if the sale falls through.

4. How much will it cost me if my house sale falls through?

The cost of a house sale falling through varies significantly, depending on how far along you are in the sale.

I'll cover this in more detail next, but if "chains" are starting to sound like a lot of "pain", it might be worth exploring alternative selling methods...

I've designed this short, free quiz to help you do just that.

Using a genuine home-buying service is one way to get your sale (and your chain) back on track. A well-funded house buying company can buy your house in as little as 7 days, or a timeframe to suit you. Although it's the easiest and fastest way to sell your house, it's not for everyone.

Take our free quiz and see if a house buying company is right for you.

If it is, I can introduce you to the company I know and trust when you get to your quiz results page.

Click below to take the quiz now:

Now let's talk about costs. Unfortunately, it's likely to be pricey.

According to numerous surveys, the average cost of a house sale falling through is around £2,500-£3,000.

Here are a couple of examples:

• In the Which survey, the average amount lost in fees after a sale fell through was £2,899.
• Home Owners Alliance found a similar figure in a 2018 study, at around £2,700 per sale fallen through.

The later in the process, the more time your solicitor will have spent on the case and the more disbursements they will have paid.

As we've covered, some fees are relatively small, such as ID checks and bankruptcy checks which may only cost a few pounds. Other charges can be substantial though, such as the searches and the leasehold management pack.

4.1. Charges can be even higher when a chain collapses

If you are in a chain that collapses, you could end up paying twice. This would be for fees and disbursements incurred on both selling your home, and buying the property you were hoping to move into.

Related: What is a house chain? (How chains work, with examples)

According to Which, while 16% of buyers lost nothing at all, 5% of buyers lost over £5,000 when their property transaction fell through. It's likely to be those who were both buying and selling who were the hardest hit.

5. How to recoup charges if your house sale falls through

Unless you have exchanged contracts, you have no legal recourse to recoup your costs from the buyer or seller, as there is no formal contract in place until this point.

However, even if your sale's fallen through and you're facing steep costs, all may not be lost. You may actually be able to recoup some of these costs.

For example, things like identity checks and bankruptcy checks only need to be done once, so if you're moving on to buy or sell another property, you won't need to pay these again.

There are other ways to save too though. I've got some specific tips for buyers and sellers, which I'll go into here.

5.1. How sellers can recoup costs

Tip 1. Solicitor fees

If your sale falls through and your solicitor's not a "no sale, no fee" solicitor, you may still not end up incurring costs.

All the time and effort they've spent getting to know your property isn't wasted. Once you find another buyer, they can simply pick up where they left off. This means that some solicitors won't bill you when the sale falls through - they'll only submit their invoice if you decide to withdraw the property from sale altogether.

Even if they do bill you when the sale falls through, they'll normally credit the amount towards your invoice for your eventual sale.

For example, if they charge you £500 after your sale falls through, they should reduce their final bill by £500. Why? Because ultimately they haven't really had to duplicate much of their work at all. (So why should they duplicate their fees?) 

Tip 2. Management pack (for leasehold properties)

If you're selling a leasehold property, then the management pack's going to be your biggest upfront cost. It's usually around £200-£300. Thankfully though, the pack doesn't simply "expire" if your sale falls through. The information is all still completely relevant, and you can just use it again once you find a new buyer.

Some of the information does expire with time, but asking for one or two bits of updated information is usually much cheaper than buying a totally new one.

5.6. How buyers can recoup costs

We outlined above how sellers can often avoid incurring legal fees when a sale falls through by just sticking with the same solicitor.

However, this isn't the case if you're buying. If your solicitor's spent several hours getting to know a property and you then decide not to buy it (or if you're unable to), the time and effort they've spent is wasted. This means they'll likely charge you for their time.

There are still ways a buyer can recoup costs though.

Tip 1. Selling your searches to the seller

The searches were likely your biggest expense, at around £300 for a complete set. That cash may not be gone for good though.

The annoying thing with searches is that they take a long time to get, even after you've paid them. (In the wake of the pandemic, waiting times for the "local search" have been 8-12 weeks in some places!)

This means that if you withdraw from the purchase and the seller finds a new buyer tomorrow, the seller is still going to have to wait at least 2-3 months before the solicitors even start doing their work! 

They can massively reduce this waiting time by simply buying your searches from you, and selling them to their next buyer.

This is a really great solution, but it rarely happens. This is because estate agents don't really suggest it (probably because they're not the ones out of pocket - so who cares!) 

But you should definitely explore it. It's not going to work every time because searches do have an expiration date (usually of around 6 months). But it could save you £300 - so have the conversation.

Tip 2. Selling your survey to the seller

If you've had to withdraw form the purchase due to an adverse survey, it may be worth trying to sell it to the seller. They're probably going to need to fix whatever put you off, and to fix it they're going to need to diagnose it...

Why go to the hassle of arranging a new survey and then waiting several weeks for it, if they can just buy one directly from you? 

Again, it isn't going to work every time, but you should certainly explore it.

6. How to repair a broken chain quickly

Unfortunately, sale "fall throughs" are here to stay because of the way the UK housing market works.

With a 30% chance of each sale failing, not only can costs add up quickly, but long chains can be notoriously difficult to complete too.

You may wonder what to do if your house sale has fallen through, but there are still options.

6.1, Cash House-Buying Services

Using a cash home-buying service is one way to get your sale (and your chain) back on track. Cash house buyers cover all your legal fees, including disbursements. But more importantly, they can give you an offer in 48 hours, provide a fixed-price guarantee, and exchange contracts in as little as two weeks.

I designed a short 60-second quiz to help you figure out if a house-buying company is the right option for you.

(And if it is, I'll introduce you to the company I know and trust when you get to your quiz results page).

Hit the button below to get started:

The service does come with a significant compromise on price (you should expect an offer around 85% of your previous sale price), but it can be the right fit if you're hoping to avoid the risk of losing the home you plan to buy).

Remember, you may be able to negotiate a discount on your onward purchase as well, so the discount is spread across multiple sales.