Answer: An offer to buy or sell a property is not legally binding in England and Wales until contracts are exchanged.
I am not sure how much work has been done in your case, or what progress has been made to date but if you had an estate agent acting for you, the buyer would have made the offer through that agent. Explain to your agent about your change of heart and then the agent can inform the buyer of your decision.
If you have no agent because it was a private sale and the buyer made the offer directly to you, then you will have to inform the buyer that you no longer wish to proceed with the sale. Generally there are two identical parts to a contract for the sale and purchase of a property, with one part signed by the seller and the other by the buyer.
However, signing a contract does not make it binding until there is an exchange of contracts — which means that the two parts of the contract are physically exchanged, or the parties’ solicitors agree with each other by telephone that the contracts are deemed to be exchanged. At this point the contract becomes legally binding on both parties.
A solicitor must always obtain the client’s authority before exchanging contracts and it is on exchange of contracts that the deposit is paid. If contracts had been exchanged and you pulled out of the sale, you would be in breach of contract.
Even though contracts were not exchanged your buyer may ask you to meet or contribute to her out-of-pocket expenses, such as any survey or mortgage valuation fees or solicitors' costs which will now be wasted.
There is no legal obligation on you at all to get involved in this but very occasionally some sellers feel morally obliged to make some sort of contribution, depending on their reason for not proceeding.
What’s your problem? If you have a question for Fiona McNulty, please email firstname.lastname@example.org or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE. We regret that questions cannot be answered individually but we will try to feature them here. Fiona McNulty is a partner in the residential property, farms and estates team at Withy King LLP (www.withyking.co.uk).