Where do I stand if the buyer withdraws before exchange?
Nowhere, legally. In England and Wales an agreement to sell land is only binding once it is in writing, contains all the agreed terms and is signed by both parties, under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, and in practice that means once contracts have been exchanged. An accepted offer, a memorandum of sale from the agent, an email confirming the price: none of them bind either side. The buyer can walk away the day before exchange and so can you.
Both sides are free until exchange, and both are exposed. Your wasted costs, the searches on your related purchase, the legal work done so far, are not recoverable from the buyer. Nor are theirs from you. The estate agent's fee is usually not payable unless the sale completes, but read the agency agreement, because some are not written that way. Where an agreement uses the term "ready, willing and able purchaser", the Estate Agents (Provision of Information) Regulations 1991 prescribe what the agent must tell you it means: that such a purchaser is one who is prepared and able to exchange unconditional contracts, and that you will be liable to pay the agent if one is introduced in accordance with your instructions, even if you later withdraw and contracts are never exchanged, whatever your reasons. So an accepted offer alone does not trigger it, because the buyer has to be in a position to exchange; the real exposure is a fee where no contract is ever made at all. A clause worded differently is read on its own terms, so the clause is what matters rather than the label. If the agent used the term but never gave you that explanation, section 18 of the Estate Agents Act 1979 means the agreement cannot be enforced against you without an order of the court, and on such an application the court may dismiss the claim or reduce the fee, having regard to the prejudice to you and to how culpable the agent was. That is a discretion rather than an escape, so a fee should not simply be refused on the strength of it (checked 20 September 2026).
Reservation agreements and lock-out agreements exist. A reservation agreement commits both sides to a small deposit forfeited by whoever withdraws without good reason; a lock-out agreement stops the seller dealing with anyone else for a set period but does not oblige the buyer to proceed. Both are enforceable if properly drafted, and both are uncommon outside new build, where developers use reservation fees routinely. What is exchange of contracts explains the moment everything changes.
The realistic protection before exchange is speed and preparation. The longer the period between an accepted offer and exchange, the more opportunity there is for a buyer to see another property, lose a mortgage offer, or be let down by their own chain. Most withdrawals happen not because the buyer changed their mind about the house but because something else changed while they waited.
What can I do if the buyer fails to complete after exchange?
After exchange the buyer is bound by the contract, which in almost every residential sale incorporates the Standard Conditions of Sale, fifth edition 2018 revision. Under those conditions the buyer pays a deposit on exchange, conventionally ten per cent of the price, held by the seller's conveyancer as stakeholder, and completion takes place on the date fixed in the contract. If the buyer does not complete on that date, time is not automatically of the essence, so the buyer is late rather than in fundamental breach, and interest starts to run.
Your conveyancer then serves a notice to complete. Under condition 6.8.2 the notice makes time of the essence and gives the buyer ten working days to complete, excluding the day the notice is given, and under condition 6.8.3 a buyer who paid less than ten per cent must immediately make the deposit up to that figure. What accrues is compensation under condition 7.2 rather than interest, and it is worth knowing that it nets off: condition 7.2.1 makes it payable by whichever party's total period of default is the greater, so a seller who is also in default recovers only on the excess. Condition 7.2.2 calculates it at the contract rate on the purchase price less any deposit paid, for that excess period. The contract rate is the Law Society's interest rate in force, which the Law Society sets at four per cent above Barclays Bank base rate and publishes on its own site, so the sum is often significant on its own.
If the buyer still does not complete when the notice expires, you can rescind the contract. You keep the deposit, with any accrued interest on it, you can resell the property, and you can claim damages for your further loss: any shortfall on the resale price, the costs of the resale, wasted costs on your own onward purchase, bridging finance, storage and removals. The deposit is credited against the damages, not added to them, and the buyer is liable for the balance. The court retains a discretion to order the return of a deposit under section 49(2) of the Law of Property Act 1925, but it is exercised rarely, and the test is not simply whether forfeiture seems unfair. The Court of Appeal in Midill (97PL) Ltd v Park Lane Estates Ltd [2008] EWCA Civ 1227 held that a deposit is an earnest for performance which the seller may keep without regard to actual loss, and that there must be something special or exceptional to justify overriding that. A seller who suffers no loss, or who resells at a higher price, is not by itself enough.
Recovering more than the deposit means suing, and a buyer who could not complete is often a buyer without money. In practice the deposit is the remedy most sellers actually receive.
| Buyer withdraws before exchange | Buyer fails to complete after exchange | |
|---|---|---|
| Is the buyer in breach? | No; there is no contract | Yes, from the contractual completion date |
| Can they be made to proceed? | No | In principle, by an order for specific performance; rarely worth pursuing |
| The deposit | None has been paid | Forfeited after a notice to complete expires |
| Your wasted costs | Not recoverable | Recoverable as damages, subject to the buyer's means |
| Interest | None | Runs at the contract rate from the completion date |
| Your related purchase | Your own seller is free too; you may lose it | Your own contract still binds you; the loss is claimable from the buyer |
| Remarketing | Immediately | Only once the contract is rescinded |
| Typical outcome | Start again with a new buyer | Keep the deposit; resell; pursue the balance if it is worth it |
What happens to my own purchase if my sale collapses?
Before exchange, nothing binds you either, and your seller is free to sell elsewhere. Most sellers in a chain will give you time to find a new buyer, but they are not obliged to, and if they have another offer you may lose the property. Telling your own seller and their agent immediately, with a realistic estimate of how long a replacement will take, is the best way to keep them.
After exchange, the position is much more serious, because exchange in a chain is simultaneous: you exchanged on your purchase at the same moment as your sale, and your own purchase contract still binds you even though the money to complete it has vanished. If you cannot complete, your seller can serve a notice to complete on you and forfeit your deposit. Bridging finance, a short-term loan against the property you are selling, is the usual way through, and its cost is one of the losses you can claim from the defaulting buyer.
This is why a conveyancer will not exchange on your purchase until your buyer is ready to exchange on your sale, however much pressure the top of the chain applies. Buying and selling at the same time is run as a single transaction for exactly that reason.
How do I protect myself against a buyer pulling out?
Have the contract pack ready before you find a buyer. The title register and plan, the property information form, the fittings and contents form, the energy performance certificate, planning and building regulations documents for any works, guarantees, and for a flat the management pack, can all be assembled on the day you instruct an agent. A buyer who receives a complete pack within days of an accepted offer exchanges weeks earlier than one who waits a month for the first draft contract, and every week saved is a week in which nothing can go wrong.
Qualify the buyer. Ask the agent for evidence of a mortgage offer, or at least a decision in principle from a named lender, and proof that the deposit exists. A buyer who is themselves selling should have a buyer of their own under offer, and you should know how long their chain is. A chain-free buyer with a mortgage offer in hand is often worth more than a higher offer from the end of a long chain.
Answer enquiries quickly and honestly. Most buyers who withdraw late do so because something emerged that they felt should have been disclosed earlier: a dispute with a neighbour, a flood, an unconsented extension, a lease that turns out to be short. Disclose it in the property information form, deal with it before marketing where you can, for example with indemnity insurance for missing consents, and the buyer prices it in rather than walking away.
Where a chain looks fragile, ask your conveyancer to press for an early exchange with a longer gap to completion. Once contracts are exchanged the buyer is committed and the length of the completion period is no longer a risk to you. And where a buyer asks to exchange on a reduced deposit, understand that you are reducing the only remedy you are likely to collect.