Who Pays Solicitor Fees If a Sale Falls Through?

The quick answer: if your sale or purchase falls through before you exchange contracts, each side pays their own solicitor fees. There is no mechanism in England and Wales that forces the other party to reimburse your legal costs, however unfair that might feel when you are the one left out of pocket. Once you exchange contracts, the position changes sharply: the party who pulls out at that stage risks forfeiting their deposit and can be pursued for the other side's losses.

Collapsed property sales are far more common than most buyers and sellers expect. Research from HomeOwners Alliance and Which? consistently puts the fall-through rate in England and Wales at around 25% to 30% of agreed sales, meaning roughly one in four to one in three transactions never reaches completion. Understanding what you stand to lose, and at which stage of the process, helps you budget properly and take sensible precautions before you commit to conveyancing fees you might not be able to recover.

The rule that each side bears their own costs applies throughout the entire pre-exchange period, no matter how far along the transaction has progressed. It makes no difference whether the sale collapses in week one or week fourteen, or whether the collapse is your fault, the other party's fault, or nobody's fault at all, such as a chain collapsing three links away from you. The Law Society's guidance on abortive transactions confirms this position: legal costs incurred before exchange of contracts are treated as a normal commercial risk of buying or selling property, not a liability that transfers to whoever caused the sale to fall through.

Scotland operates under a different system entirely. Once an offer is formally accepted through concluding missives, both parties are legally bound, so the each-side-pays-their-own-way problem rarely arises because far fewer Scottish transactions collapse after that point. This guide focuses on the rules in England and Wales, where the exchange of contracts, not an accepted offer, is the moment a sale becomes binding.

When a purchase or sale collapses before exchange, the costs you have already paid do not disappear, they simply stop delivering the outcome you paid for. Some of these costs are refundable in part, most are not. Knowing the rough numbers helps you weigh up the real financial exposure before you instruct a solicitor.

Legal fees make up the biggest variable. If your solicitor charges on a traditional basis, you owe them for the work already completed even if the sale never finishes, and that bill typically ranges from a few hundred pounds for an early-stage collapse to £1,000 or more if the file reached exchange preparation. Disbursements such as search fees, usually £250 to £400, and identity verification charges of £5 to £20 are paid to third parties and are almost never refundable once ordered. Buyers carry two further costs sellers do not: a survey, typically £300 to £1,500 depending on the level of detail, and a mortgage valuation fee, which can run from nothing, if bundled free by the lender, up to £300.

Add these together and a typical failed purchase costs a buyer somewhere between £500 and £3,000, with the wide range reflecting how much progress had been made and which optional reports were commissioned. Sellers usually face a narrower loss, generally £300 to £1,000, because they do not pay for surveys or mortgage valuations. The table below breaks down where the money goes for each side.

Not every collapsed sale unfolds the same way, and who ends up paying depends heavily on which stage of the process you had reached and who instigated the collapse. The four scenarios below cover the situations Money Saving Advisors readers ask about most often.

Buyer pulls out before exchange

If you are the buyer and you decide to withdraw before exchange of contracts, you pay your own solicitor's fees for work completed, your survey costs, and any search fees already ordered. You cannot claim any of this back from the seller, even if your reason for pulling out was something the seller failed to disclose, such as a structural issue. The seller, in turn, pays their own legal costs and is free to remarket the property immediately with no compensation owed to you.

Seller pulls out before exchange, including gazumping

When a seller withdraws, whether they have simply changed their mind or accepted a higher offer from another buyer, a practice known as gazumping, you as the buyer have no legal right to recover your wasted survey, search, or legal costs. This is one of the most frustrating outcomes in English and Welsh conveyancing, because you can lose £1,000 or more through no fault of your own. The seller similarly bears their own legal fees, but does not compensate you unless you agreed a lock-out agreement beforehand that included a cost-recovery clause.

Chain collapse

Many transactions fail not because of the two parties directly involved, but because a link elsewhere in the chain falls through, for example a buyer three property purchases away loses their mortgage offer. If your own sale and purchase were otherwise ready to proceed, you still bear your own costs. There is no route to recover fees from a party you never contracted with, even though their decision derailed your entire transaction.

After exchange of contracts

Everything changes once contracts are exchanged. At this point the transaction becomes legally binding, and whichever party pulls out is in breach of contract. The defaulting buyer typically forfeits their deposit, usually 10% of the purchase price, and can be pursued for the seller's additional legal and remarketing costs plus any shortfall if the property is later sold for less. A defaulting seller can be sued for damages and, in rare cases, forced to complete through a court order for specific performance. Read more about what happens at exchange of contracts and completion.

No sale, no fee conveyancing sounds like it removes all financial risk, but the small print rarely matches the headline promise. Understanding exactly what is waived, and what still gets charged, prevents an unpleasant surprise if your transaction collapses.

Under a genuine no sale no fee arrangement, your solicitor waives their legal fee, the amount they would otherwise charge for their own time and expertise, if the sale falls through before completion. That is a meaningful saving, since legal fees typically make up £500 to £1,500 of the total bill. However, disbursements, the third-party costs your solicitor pays out on your behalf such as search fees and bank transfer charges, are almost always still payable because your solicitor has genuinely spent that money and cannot recover it from the search provider.

Some firms also apply an abortive transaction fee, a smaller charge, typically £100 to £300, to cover the administrative time spent opening the file, running compliance checks, and corresponding with the other side before the deal collapsed. Always ask for this in writing before you instruct a solicitor, since it rarely appears prominently in marketing material. Read the terms carefully for phrases like subject to disbursements or abortive fee applies, which signal you are not fully protected.

You cannot eliminate the risk of a collapsed sale, but you can significantly reduce how much it costs you if one happens. A handful of precautions taken early in the process make the biggest difference.

Take out homebuyer protection insurance

Learn more about homebuyer protection insurance before you commit to any non-refundable costs. Policies reimburse your survey, search, and legal costs if the purchase falls through for reasons outside your control. Premiums typically cost £30 to £100 and must be arranged before your conveyancer starts ordering searches, since cover does not apply retroactively.

Ask about fee structures before instructing

Before you sign up with any firm, ask directly what happens to your bill if the sale collapses at each stage: before searches, after searches, and after exchange preparation begins. Get the answer in writing rather than relying on a verbal assurance from a salesperson.

Get a mortgage agreement in principle before offering

An agreement in principle speeds up your mortgage application once you have found a property, shortening the vulnerable window between your offer being accepted and exchange of contracts. The shorter that window, the less time there is for a chain to collapse or a seller to be tempted by a higher bid.

Check the chain carefully

Ask your estate agent how many transactions sit above and below yours in the chain, and whether any parties are still searching for a property to buy or a buyer for their own home. A long, unconfirmed chain carries meaningfully higher collapse risk than a straightforward transaction with a first-time buyer or a cash buyer at the other end.

Consider lock-out agreements

A lock-out agreement is a short exclusivity period, typically two to six weeks, during which the seller agrees not to negotiate with other buyers. It will not stop every collapse, but it closes off the specific risk of gazumping while your conveyancer works through the conveyancing process.

Whether you can claw back any of your wasted money depends entirely on the stage the transaction had reached when it collapsed.

Before exchange of contracts, the honest answer is no. Neither buyer nor seller has any legal right to recover solicitor fees, survey costs, or search fees from the other party, regardless of who caused the collapse or how unreasonably they behaved. This is a settled position under English and Welsh property law and is unlikely to change without a legislative reform introducing reservation agreements or mandatory deposits, proposals that remain under discussion but have not been enacted.

After exchange, the picture flips completely. The party who defaults is liable for the other side's reasonable losses, which can include remarketing costs, additional legal fees, mortgage costs incurred by delay, and the shortfall if a property is resold for less than the original agreed price. The non-defaulting seller also keeps the buyer's deposit, typically 10% of the purchase price, without having to prove any specific loss.

If you believe the other party behaved unreasonably before exchange, for example by stringing you along with no genuine intention to proceed, you have limited options. Small claims court action is theoretically possible for provable financial loss caused by misrepresentation, but such cases are rare, hard to win, and rarely worth the legal cost involved for typical exposures under £3,000. Speaking to a solicitor about your specific circumstances is worthwhile before deciding whether to pursue a claim.