Can I pull out of buying a house when my Offer has been accepted?

Image of cartoon man walking away from a house - how can I pull out of buying a house

Clients sometimes ask “can I pull out of buying a house after my Offer has been accepted?”. Buying a house is probably the biggest financial transaction you will enter into in your life. It’s important to get this right. Before you begin the process of buying a house, you need to make sure a number of things are in place. You need to have sold your existing house or be confident that it will sell before your entry date for your new house. If you need a mortgage, make sure this has been agreed. Importantly, make sure you really want the house you’re buying. There’s a considerable amount of legal work involved in the early stage of your purchase. That means it’s very important that you have everything in place before you start!

Sometimes, when you’re buying a house, your circumstances change. When that happens, the first question you might ask is “can I pull out of buying?”. Whilst the question is pretty straight forward, the answer is usually “it depends”.

When you offer to buy a house, your solicitor must submit that offer in writing. The selling solicitor or estate agent will speak to the seller and let you know if your offer has been successful. That’s usually when you’re told “your offer has been accepted”. The problem with that, from a buyer’s perspective, is that whilst this is a verbal acceptance, it isn’t a binding contract.

How is the contract created?

In Scotland, the contract to buy or sell property (called “missives” by lawyers) must be in writing. There must be a clear written agreement to buy or sell the house. This takes place through an exchange of letters between the buyer’s and seller’s solicitors. This starts with the offer which will contain practical as well as technical conditions. The practical conditions are generally the price, date of entry and extras included. The technical conditions relate to title, capacity to sell and a number of other matters.

When the seller’s solicitor receives the offer, they will give an indication of acceptance to the buyer’s solicitor. They then go about the task of providing a written acceptance. Usually, that written acceptance will contain conditions of its own or accept or modify the conditions in the offer. This is called a “qualified acceptance”.

The buyer’s solicitor then has to consider if these conditions are acceptable or whether further changes are needed. This process can go back and forward for some time until agreement is reached. Solicitors call this point “conclusion of missives”.

At which point can I pull out of buying?

The simple answer to this question is that you can pull out of buying at any time up until missives have been concluded. If the contract to buy hasn’t been concluded, then you, as the buyer, can pull out at any time.

If missives have been concluded and a contract to buy and sell exists, it may be impossible to pull out of buying. However, if the contract is conditional on certain things happening – and most contracts are – then there might be an opportunity to pull out of buying. The circumstances surrounding that are technical and need to be addressed on a case by case basis.

We should also say that if you do decide to pull out of buying after conclusion of missives, you can still do that but there are contractual costs you will have to face. If you do withdraw after conclusion of missives, this is considered to be breach of contract. The costs of doing this can be very substantial so it is something you need to consider very carefully.

So, as a rule of thumb, you can pull out of buying a house if the contract (or missives) hasn’t been concluded. You must check this with your solicitor before making this decision.

If you would like to discuss any aspect of buying or selling your house, please don’t hesitate to contact us.