LEGAL
Buying your first property is a big decision, so what happens if you get it wrong? How late is too late to back out? Stephen Ward, Director of Strategy and External Relations at the Council for Licensed Conveyancers, explains the risks and the importance of understanding your buying power before you embark on the homebuying journey What if things go wrong?
GAZUMPING AND GAZUNDERING
Your offer has been accepted and it’s all systems go. Or is it? What happens if you change your mind about buying the property and want to put the brakes on the sale? There are many reasons why you may want to retract your offer – a job loss, financing falling through or simply a change of heart. It’s not ideal, nor is it impossible, but whether you can extract yourself without legal penalties will depend on where you are in the purchasing process. COUNTDOWN TO CUT-OFF: THE CONTRACT EXCHANGE Either party can pull out of a property transaction without legal penalties up until the exchange of contracts – a pivotal point in the sale process where the purchase becomes legally binding. If you are having second thoughts, you should therefore contact your conveyancer as soon as possible and definitely before this point to avoid any legal repercussions. It is important to note, however, that you may still be liable for costs such as estate agent fees and legal bills for work undertaken. If you try to pull out afterwards, this constitutes a breach of contract for which the penalties are much higher. Buyers typically pay a deposit on the property when contracts are exchanged and will usually lose some or all of this money.You may also have to pay compensation to the seller and may be served with a “Notice to complete” – a legal document giving you a set period of time, usually 10-14 days, in which to finalise matters or face further action. The good news is it works both ways
involving the type of property you are intending to buy. Practices regulated by the CLC will have our badge prominently displayed on their website which, when clicked on, will take you to our site and confirm that the firm is genuinely regulated by us. You can nd a list of CLC-regulated conveyancers, as well as more guidance on buying and selling property, at clc-uk.org
Once a seller accepts your offer, they may inform you that they have been offered a higher price by another would-be buyer. This is known as “gazumping” and is legal in the UK, provided it happens before contract exchange. Homebuyers’ protection insurance, while it won’t guard you against gazumping, could help you recoup some of the costs and is worth considering. Gazundering is where a buyer withdraws their offer, often at the very last minute, in a bid to make the seller accept a lower offer or agree to other demands. It is a risky tactic though as you could end up losing out on the property altogether if your attempt at gazundering is rejected. BUYING POWER Before you embark on your house hunting search, it’s important to understand your buying power.This means what budget you have and what it has to cover, as this will ensure you do not overstretch yourself and can keep up with any mortgage repayments. Keep an eye on your mortgage offer to make sure it does not expire. It’s also a good idea to have additional funds set aside should any unexpected issue arise. Buying a house is likely to be one of the biggest investments you make in your lifetime so it is important that you safeguard your interests by choosing
a reliable conveyancer who is regulated and has experience of handling sales
– if the seller pulls out, they could also face penalties from you for breach of contract, which
typically involves returning your deposit and reimbursing you for any reasonable legal or surveyor costs.
110 First Time Buyer August/September 2026
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