Three Methods for Homebuilders to Decrease Fall-throughs and Optimise Home Sales in 2024

In every industry, taking precautions to prevent unnecessary costs is an important part of protecting profits and generating financial success. 

For homebuilders, one of the most expensive costs to your business is that of fall-throughs.  Analysing data from Q3 of 2023, Home Sale Pack found that, ‘Fall throughs are estimated to have cost UK buyers and sellers £270m,’ as revealed by Property Reporter.  They also estimated the average cost per fall-through to have risen to an eye-watering £3,433.

In this blog, we will be looking at the reasons that home sales fall through, and what homebuilders can do to keep this outcome to a minimum.

Why do Home Sales Fall Through?

Before we can approach the subject of reducing fall-throughs, it is first important to understand why so many homes do not complete their sale.

The Home Selling Expert explains that, ‘Home sales don’t always fail because the buyer pulls out - but buyers do cause the majority of fall-throughs.’  So, what is putting these buyers off?

Although each case is unique, with its own set of issues, there are a certain number of common reasons that buyers pull out.  There are reasons that buyers pull out of home sales that are not a consequence of anything the homebuilder has or hasn’t done.  For instance, personal reasons, such as, a poorly distant relative that needs assistance, moving in with a partner, etc., and financial reasons, such as, the buyer losing their job, a failed mortgage application, etc.

But there are also a few common reasons for fall-throughs that the homebuilder can take steps to prevent.

Here, we will take each of these three preventable reasons that buyers pull out of home sales in turn, while discussing the relevant measures developers can take in these circumstances, to protect their home sales.

Cold Feet and Emotional Factors

It might surprise some to know that one of the most common reasons for a buyer to pull out of their home purchase has nothing to do with finances or the property itself.  As a home is one of the largest purchases we make in our lifetimes, it comes with emotional baggage.  As Speed Property Buyers advise, ‘Buying a house is a significant financial and emotional investment.  Buyers may experience anxiety, doubts, or second thoughts about their decision to purchase, commonly known as “cold feet.”’

When you are dealing with prospective buyers, it is important to bear in mind the significance of the buying process for them, and the commitment that they are making.  One method of helping buyers through any doubts or feelings of cold feet, is to provide an exceptional service in your customer care.

Taking the time to get to know your buyers will pay dividends, with a good relationship formed that can withstand the long process of building and selling a home.

Stay in touch with buyers and provide them with regular updates on the progress of the build to elevate their levels of anticipation and excitement.  Using an app like Spaciable Living allows you to maintain communication with your buyers at the tap of a button.  Here, you can send notifications and calendar invitations for meetings, ensuring the buyers remain engaged in the process and no appointments get missed.

Above all, ensure your relationship with your buyers is open, honest and positive.  When buyers are met with warm honesty, they begin to lose their feelings of doubt about the purchase, and can see you are a developer they should be buying a house from.

Legal Obligations and Missed Deadlines

Buying a home is a legal process and this can lead to challenges, especially in the case of new buyers who are not aware of their obligations, such as meeting deadlines, fulfilling specific conditions and complying with legal requirements.  As Speed Property Buyers explain that they may opt to pull out of the sales, ‘If buyers encounter difficulties or obstacles related to these obligations.’

It is vital, therefore, to educate your buyers on your particular sales process and ensure that they understand what they need to do in the lead-up to completion.

Providing your homebuyers with Reservation Manuals is a great way to ensure you are providing that education.  Working as step-by-step guides to the various stages of your company’s buying process, in user friendly, jargon-free language.

As these documents support your buyers through the sales process with easy to understand information, they naturally reduce buyers’ remorse and cancellations.  Not only that, but they offer a helpful list of FAQs, empowering your buyers to self-serve information and avoiding unnecessary calls to your customer care team.

Additionally, these Manuals work to set expectations of the level of care your buyers will receive throughout the process.  This provides the assurance they need that you will work with them throughout the sale and support them in their new home.

Delays in the Sales or Building Process

As a homebuilder, you’ll likely be aware of the effect you can have on the mortgage application of your buyers.  ‘Most mortgage providers put an expiry date on their mortgage offer of around three to six months,’ reveals House Buyer Bureau.  They go one to explain that, ‘If completion is seriously delayed, the property’s value may have changed and it may be necessary for the buyer to make a new mortgage application. Not only will this delay the sale further, but there is always the risk that the application will not be successful.’

In some cases, the speed of the home’s construction will be delayed for reasons out of your control.  Any precautions you can take to meet your build deadlines should be a priority, as they could otherwise mean the loss of the sale.

However, not all delays are construction-based.  ‘Around two thirds of ‘fall-throughs’ are preventable, and many can be avoided simply by speeding up the process,’ argues Petty Son and Prestwich.  ‘Speeding up the process’ here should mean that the contracts and documents are shared, signed and submitted on or, ideally, before any deadline.

Yes, we have discussed buyers delaying these procedures through lack of knowledge, but this can also be true of the seller, when systems and processes within the sales department are not as streamlined or efficient as they could be.

One of the best methods of preventing any delays from within your organisation is by going digital.  Losing your paper processes and moving to a digital system is an advised method of speeding up the sales process.  As Property Reporter wrote back in 2022, ‘An important step, which was also highlighted by the Government’s Levelling Up White Paper, is an emphasis on digitalisation by making Home Information Packs (HIPs), or logbooks, a standardised tool for any property sale.’  Yet, there are still many homebuilders who are not using digital processes and delaying the sales of their homes.

Opting for our residential platform, Spaciable, or our resident engagement and property management app, Spaciable Living, allows you to digitise your processes right from the moment a potential customer registers an interest in one of your homes.

Not only do these digital platforms allow you to communicate with your buyers directly, they also provide tools such as digital libraries, where documents can be shared by both parties, speeding up an otherwise back-and-forth process of distributing and signing legal documents.

In a property market that is still recovering and not yet back up to full speed, it has never been more important to reduce unnecessary costs and protect your profits.  To find out more about our products and services, and to discuss your options, get in touch at: https://www.classicfolios.com/contact