What happens if a buyer pulls out after exchange?
Most sales collapse before exchange, but if a buyer withdraws after exchange, the stakes are much higher. At this stage, both sides are legally bound. A withdrawal can trigger financial penalties, legal disputes, and even the collapse of your onward purchase. This guide explains your rights, the consequences for the buyer, and the practical steps you can take to recover — including how Habello provides a guaranteed fallback sale when you need certainty.
When a buyer pulls out after exchange:
- They are in breach of a legally binding contract.
- You can usually keep their 10% deposit.
- You may also claim damages (legal costs, removals, lost equity).
- Courts can compel the buyer to complete, or award compensation.
- To move forward quickly, you can re-market, auction, or secure a cash offer from Habello.
(For situations before exchange, see our companion guide: How to sell quickly after a buyer pulls out.)
Why exchange changes everything
- Before exchange: either side can walk away with no legal penalty.
- After exchange: the sale is binding. The buyer takes on equitable title and must complete on the agreed date.
If they don’t, they are in breach of contract.
Your rights if a buyer pulls out after exchange
- Deposit forfeiture – Typically 10% of the sale price. On a £300,000 property, that’s £30,000.
- Damages claim – You may recover extra costs like legal fees, mortgage interest, removals, or even losses from having to sell for less later.
- Force completion – Courts can order the buyer to complete (specific performance), though this is rare and can take time.
Common reasons buyers walk away post-exchange
- Mortgage funds fail at the last minute.
- Sudden personal issues (job loss, illness, relationship breakdown).
- Buyer’s remorse or cold feet.
- Unexpected survey issues or valuation disputes.
Unlike pre-exchange walkaways, these have serious financial and legal implications for the buyer.
What to do if this happens
1. Serve a Notice to Complete
Your solicitor gives the buyer 10 working days to complete. If they fail, you can keep the deposit and pursue damages.
2. Negotiate a settlement
Sometimes a partial settlement is quicker than litigation — e.g. you keep the deposit plus compensation for your costs.
3. Re-market quickly
You can relist on the open market or through auction. See our related guide How to sell quickly after a buyer pulls out for step-by-step tips.
4. Accept a guaranteed offer from Habello
If you need to save your onward chain or hit a court deadline, Habello provides:
- Free valuation in 48–72 hours.
- Guaranteed cash offer.
- Completion in 7–21 days.
- No estate agent fees, and legal fees covered with partner solicitors.
Example scenario
- Agreed sale price: £350,000.
- Buyer pulls out after exchange.
- Deposit retained: £35,000.
- Seller incurs £5,000 costs (legal, removals, storage).
- Seller then sells to Habello for £300,000.
- Net recovery: £330,000.
Without Habello, the property could have taken months to resell, costing them their onward purchase.
Comparison: recovery routes after post-exchange withdrawal
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FAQs
Do I always get the deposit?
Yes — unless you agree otherwise. Your solicitor can arrange forfeiture.
Can the buyer sue me back?
Only if you breached the contract (e.g. vacant possession not provided). Otherwise, liability sits with them.
How is this different from before exchange?
Before exchange there’s no binding contract, so buyers can walk away with no penalty. See our guide How to sell quickly after a buyer pulls out for that scenario.
Recap: what happens if a buyer pulls out after exchange
- Post-exchange withdrawal is a breach of contract.
- You can keep the deposit, claim damages, or even enforce completion.
- Legal recovery takes time, so many sellers pivot to a faster fallback — auction or cash buyer.
- Habello provides the fastest guaranteed outcome when you need certainty.
Sell with Habello
If your buyer has pulled out after exchange and you can’t afford delays:
- Get a free valuation within 48–72 hours.
- Receive a guaranteed cash offer.
- Complete in as little as 7–21 days.
- No agent fees; legal costs covered when using partner solicitors.
Start here: sell your house for cash.
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