Falling at the final fence

PROPERTY It's the house of the buyer's dreams and the seller is happy with the price. So why do so many deals fail at the last minute? Rosalind Russell reports

THE RAMBLING thatched cottage sits at the end of a Hertfordshire lane overlooking fields. It's as quiet as the grave. It is, in fact, next to the old village graveyard. The pub is a short totter away, the station, with frequent trains to London, just a 10-minute drive. It was, said the middle-aged couple excitedly, precisely what they had been looking for. The garden at the back leads down to a stream. At the front, roses scramble over mossy ancient walls, lilac and buddleia smother the gateposts.

"They were so keen to buy," says the owner, Richard Holledge, "they didn't quibble about paying the asking price, which was pounds 210,000. In fact, they insisted I bring forward my moving date by four months. The chap told me his wife was so besotted with the house, she drove up the lane every day to see it." Under pressure to sell quickly, Richard found a new home and paid the initial legal and search fees, some pounds 380. Impatient to exchange contracts, the buyers telephoned frequently. "They even asked if they could come round and prune the roses before they moved in."

Richard decided to grab a few days' holiday. Four days later he returned to find a message from the estate agent. The buyers had pulled out. No reason was given. "They dropped off the face of the earth. I never heard from them again."

Ask any estate agent about house sales that fall at the last fence. It's like striking the bung out of a beer barrel. Anguish, frustration and fury flood out, along with painful memories of commissions evaporating faster than England's cricket hopes.

One couple selling their period home in East Anglia thought their sale was going like a dream. Their buyer was so enthusiastic, he came round and planted dozens of rose bushes. "Forty-eight hours later, he pulled out," says Mark Stewart of Bidwells. "He'd decided the eight-bedroom house was too big. But at least the vendors ended up with newly planted rosebeds."

The problem, Mark believes, is that people get carried away when they are house-hunting. Commonsense flies out of the window. Until the last minute, that is, when doubts creep in over outbuildings with leaky roofs, rusty Victorian guttering or the reliability of the interest rate.

There are perfectly understandable reasons for backing out: discovering an application has been lodged to build an abattoir next door to the house of your dreams (a true story); finding there are plans to build a motorway service station slip road at the end of the garden (also true); a report from the surveyor detailing rampant dry rot, subsidence or rotten roof timbers. A bad survey or low valuation can account for as many as 28 per cent of all failed deals.

"Then there are what we call the 'falling-under-a-bus' cases," says John Gibson of Savills in Essex. John was congratulating himself on finding a buyer prepared to pay an over-the-odds price of pounds 340,000 on a house. "The day before exchange of contracts, the buyer was made redundant."

There are also the mad, bad and expensive to know. "Pseudologica fantastica is how they are described by a lady client of ours, a psychiatrist," says John Gibson. "They come in plagues. People who imagine they are going to buy a property when they don't have the money."

His colleague Tommy de Mallet Morgan in Surrey is well acquainted with the syndrome. "We recently had a case where buyers from abroad arrived and made an offer on a property. They returned to inspect it several times, on one occasion bringing their aged parents to look at the annexe in which they would live. They gave me the name of their solicitor, a well-known firm in the City. We agreed a price on the carpets and the curtains and we even got as far as working out where his collection of vintage cars would go. But when I telephoned the solicitors, they had never heard of the man. And we never saw him again."

Some dithering buyers even go as far as pulling out after exchange of contracts, forfeiting the 10 per cent deposit. And Savills still smart about losing the sale of a large period house in Essex. The agent, new to the branch, had been thrilled to land the instruction to sell the pounds 700,000 pile. Within two weeks he was able to announce to impressed colleagues he had the house under offer. Half an hour later the deal lay in ruins. The buyer had gone into a pub to celebrate and had boasted that he was buying this particularly fine house. The locals asked if he knew about the ghost. "You can guess the rest," say Savills drily.

"Delay in exchanging contracts accounts for about 20 per cent of last- minute pull outs," John Gibson says. "Some blame can be put at the door of solicitors. Combined with a failure to find deeds, owners not responding to solicitors' questions, or owners using the sale of the house as a pawn in their divorce proceedings, I fear dishonesty is an ever-increasing factor."

Greed too rears its ugly head. Buying and selling houses can trigger a personality change, says one experience-battered agent. People who are otherwise charming turn, overnight, into tight-fisted harpies, prepared to fight tooth and claw down to the last light bulb. "I once had a chain of five deals going through, all big houses," says Nick Churton, who now looks after the London end of business for a clutch of country agents. "The commission was going to add up to around pounds 12,000. Then the old lady in the middle of the chain rang on the day of exchange and said she was backing out." Churton's blood ran cold. "She had told me she was selling up to join her daughter in Australia. But now she claimed she wasn't getting enough for her house - selling for pounds 400,000 - and couldn't afford to go." Madam, said Churton in crisp fairy godmother tones, you are going to Australia. "I went out and bought her airline ticket. At pounds 450, it was well worth it."

Difficult sellers and buyers (usually sellers) account for 12 per cent of sale failures, says John Gibson. He recalls a recent incident where the seller - a shirt-and-tie man with a high opinion of himself - refused a good offer from a rich young arriviste wearing jeans and trainers. The house is still on the market and Stuffed Shirt has probably lost himself about pounds 100,000.

But the case of the pounds 800 bedspread takes some beating. It was, says Lorna Vestey of Knight Frank, a smart interior-designed flat in Knightsbridge, on the market at pounds 250,000. A price was negotiated. A further pounds 1,000 was to be paid to include carpets, curtains, bed and bedhead in the master bedroom. Being interior designed, they all matched, natch. Then, as exchange of contracts day approached, the owners suddenly announced they wanted a further pounds 800 to part with the bedspread.

"It wasn't as if it was anything special," says Lorna. "They were just being greedy." The demand struck a fatal blow to the deal. The buyers, disgusted, pulled out. "Buying a house is like buying anything else," explains Lorna. "You want to feel good about it. Especially as it's probably the most expensive purchase of your life."

In a last-ditch attempt to salvage the deal, Lorna offered to take the buyers to have an identical bedcover made at Knight Frank's expense. "But the damage had been done. Even when the owners rang three weeks later and offered to throw in the bedspread, it was too late." Vendors underestimate the psychological damage they can do.

Even the Scottish system has developed chinks in the armour. For so long held up as a shining example to its rackety English counterpart, it's now showing signs of fraying. It used to be that once a formal bargain was struck, neither side could back out. Two or three days was the average time from the date of a submitted offer to a firm deal tying in both parties. Untying the knot involved losing a lot of money.

"Now," says William Jackson of Knight Frank in Edinburgh, "offers are so hedged about by terms and conditions - applied by the buyers - that they will not proceed to a formal agreement until all are met. That can take several weeks." It is, Jackson says, a sign of a weak market rather than the system developing nasty English habits. Buyers are using bluster about terms and conditions to force down the price.

"The Scottish system is better, but it's by no means ideal," Jackson says. !