We've exchanged on our house sale - but now the buyer wants 10% off

My husband and I recently exchanged contracts on the sale of our home and were due to move into our next house in two weeks' time.

To our absolute shock, the buyer has now asked for 10 per cent off the agreed price.

He says he got a second opinion on the survey and now thinks he will need to do a lot of repairs.

If we don't agree, the buyer says he will withdraw. But our lawyer says the contract is legally binding, and the buyer will forfeit the deposit he already paid - 10 per cent of the home's value - at the very least.

We are desperate to move as we've been trying to sell for a year. If our buyer pulls out, our onward purchase will probably fall through, too, as we haven't yet exchanged.

We could still afford to move if we got 10 per less for our home, but feel this would be a mistake. How should we manage this situation?

Ed Magnus of This is Money replies: This is an extremely rare and unfortunate situation.

While buyers often try and haggle a bit off the agreed price before contracts are exchanged, it is seldom heard of afterwards.

Problems in the survey are often used to push for a discount. However, your buyers have left it too late here.

The fact you are relying on them to complete your onward purchase adds further complication.

For expert advice we spoke to Andrew Boast, co-founder of SAM Conveyancing and Mike Hansom, a consultant for property litigation at BLB Solicitors.

Andrew Boast replies: It's very rare for a buyer to try to renegotiate the purchase price after the exchange of contracts, because they have no legal grounds to do so.

On exchange, the buyer pays a 10 per cent deposit to the seller's solicitor and becomes contractually bound to complete the purchase on the agreed completion date.

So, if the buyer pulls out simply because they no longer want to proceed, they are immediately in breach of contract.

In that case, the seller's solicitor can issue a notice to complete, which gives the buyer 10 working days to complete the purchase.

Interest will also be charged on the remaining balance at 4 per cent above the Bank of England base rate.

If completion doesn't take place within that time, the 10 per cent deposit is forfeited, and the buyer will also be liable for other associated costs, including the seller's legal fees.

Mike Hansom replies: In most cases where the buyer fails to complete, the seller can opt to rescind the contract, with the seller retaining the deposit.

The seller would also have a claim for compensation, relating to losses such as wasted moving costs, conveyancing fees and agents' fees.

If the buyer's breach causes the seller to breach their purchase contract the compensation could be far higher. Fortunately, you would not face that situation as you have not yet exchanged.

The alternative is to require the buyer to complete the contract on the original agreed terms by suing them for specific performance.

Often people don't pursue this option because a claim will take months to conclude and be costly.

Although the general rule is the winner of litigation can recover their reasonable and proportionate costs from the losing party, there is no guarantee of recovery of costs.

In your case the buyer presents a third option, to renegotiate the contract terms.

It is not clear what they will do if you refuse to accept, but it appears they have no grounds for a claim against you, and this should influence your approach to the negotiations.

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Andrew Boast replies: If the buyer was still waiting for the results of a survey, they should never have agreed to the exchange.

Post-exchange renegotiation based on a negative survey isn't valid, because the property is legally 'sold as seen', and caveat emptor.

This is the principle that the buyer alone is responsible for checking the condition of the home before the purchase or exchange is made.

Mike Hansom adds: The general principle of 'buyer beware' obliges the buyer to satisfy themselves about the property before exchanging contracts.

They took a risk by proceeding before they established the need for repairs, and only have themselves to blame.

The position would be different if they have an argument you hid problems or gave misleading information, but this does not seem to be the case. Their change of financial circumstances is regrettable but not relevant in the eyes of the court.

Mike Hansom replies: I suggest you take a firm line with the buyers. Through your lawyer you should explain that their reasons for offering a reduced price would not stand up in court.

Warn them that if they fail to complete on the agreed date you will serve them with a notice to complete, giving them 10 working days. If they fail, you reserve the right to rescind the contract or sue for specific performance.

Then wait and see how they respond before deciding whether to offer a small reduction.

Andrew Boast replies: It's understandable that you are concerned about losing your buyer, but that risk is weighed against the benefit of retaining the 10 per cent deposit.

If your seller is losing patience, one option might be to offer them a goodwill payment to hold the property while you resell, using the 10 per cent deposit from your original buyer as some financial cover.

If you're open to accepting a lower price and just want to get the deal done, you can do that, but the buyer will need a revised mortgage offer to match the new price, and they'll have to sort that within the 10-day notice period, or they'll still be in breach and lose their deposit.

However, given the last-minute nature of these survey 'discoveries', you should ensure that these defects are real and not just an opportunistic last-minute attempt to try and save money.

You need to be confident you're not being taken advantage of.

To do that, you should request a copy of the buyer's survey report showing the specific issues.