Home Sellers Protection Insurance

Home Sellers Protection Insurance covers your up-front costs if the purchase falls through - which sadly happens more often than you realise.

Ruth Jackson-Kirby Personal Finance & Property Journalist

Selling your home can be a stressful process. Home sellers protection insurance can ease some of the worry by refunding your legal costs if your sale falls through. We explore what home sellers protection insurance is, how it can help you and whether or not you are eligible for a policy.

What is home sellers protection insurance?

When you sell your home, you have to pay money out to a solicitor or conveyancer in order to proceed with the sale. You could lose this money if the sale falls through. Home sellers protection insurance protects those expenses so you will get your money back if things go wrong.

There are lots of costs when selling a property, these include estate agent fees, removal bills and legal costs. The latter is the one you’ll start paying when you accept an offer and is the money you could lose if your sale falls through. Home sellers protection insurance pays you back for your legal costs if the sale goes wrong.

Typical situations where home sellers protection insurance would pay out include:

• A bad search result: If your buyer’s searches turn up something that derails your sale
• Low mortgage valuation: If the mortgage lender’s valuation causes a drop in your buyer’s offer
• Structural problems: the buyer’s survey report reveals structural problems that would cost a large amount to remedy or highlight something they don’t want to take on and cause them to pull out
• Death: If the homebuyer dies during the process

Is home sellers protection insurance worth it?

A seller pays on average conveyancing fees of between £610 to £950, according to research by Reallymoving. Our home sellers protection insurance costs just £65 but covers you for up to £1,650 if your sale falls through. Paying out just 10% of what you are likely to spend on protection could take the sting out of the costs associated with the sale falling through.

Around one in three house sales collapse, so there is a reasonable chance you would need to make a claim on your policy. If your sale did collapse you could get up to £1,650 back in legal fees with our home sellers protection insurance – £65 seems a small price to pay for that peace of mind.

 Protect yourself with Home Sellers Protection Insurance for just £65

What does HomeOwners Alliance home sellers insurance cover?

Our home sellers insurance covers your conveyancing fees if the sale of your property falls through. There are a number of reasons why your sale could collapse, but if it does you can be safe in the knowledge, you’ll get up to £1,650 of your legal fees back.

You would be covered if any of the following caused your sale to fall through:

• An adverse search: if the buyer’s searches reveal a problem that means they don’t want to continue with the purchase
• A bad survey: if a survey shows structural problems where repair costs would be more than 10% of the offer you have accepted to from the buyer
• Mortgage problems: if the mortgage lender’s valuation is less than 90% of the offer you have accepted so your buyer has to pull out
• Poor health: your legal costs are covered if your buyer is diagnosed with a terminal illness and wants to cancel the purchase.
• Redundancy: if the buyer is made redundant and cannot proceed
• Failed relocation: if the purchase is due to the buyer being relocated by their employer and this falls through you would be covered
• Death: your costs are covered if your buyer dies.

What isn’t covered?

Home sellers insurance covers you for the common reasons a sale could fall through where it isn’t your fault. However, if you cause the sale to derail your policy probably won’t pay out.

Here is what isn’t covered by our home sellers protection insurance:

• Early costs: any costs or expenses you incurred before you took out the policy won’t be covered if the sale falls through. So, make sure you get your insurance in place before you pay any legal fees.
• Pre-existing problems: you won’t be covered if your sale collapses due to an issue you were aware of before you took out the policy. For example, if you know that the buyer’s search will turn up a problem.
• Knowledge of a bad survey: you can’t take out home sellers insurance and expect a payout if a survey has revealed big problems with your property within the last 90 days.
• Unreasonable behaviour: if the sale falls through due to you deliberately causing delays or problems.
• Costs that can be reclaimed elsewhere: if you can get your money back from your employer or another insurance policy your home sellers protection insurance won’t pay out.
• Refunds: if you can obtain a refund for your costs, you won’t get a double payout by claiming through your insurance as well
• Voluntary redundancy: if your redundancy has derailed your sale but you were self-employed, a director or partner at the company or it was a voluntary redundancy you won’t be covered.
• Business premises: if the property you are insuring is used for business or commercial purposes that will invalidate your policy

When can I get home sellers protection insurance?

You can buy your home sellers protection insurance policy anytime from when you home goes on the market until seven days after you have accepted an offer. In order to get the most from your home sellers protection insurance you want to take out a policy before you pay any other fees or expenses to do with the sale of your property.

However, most policies last for 180 days and after that time you cannot extend or renew them. So, don’t be too eager to take out policy. The best plan is to make it the first thing you do after you’ve accepted an offer. That way you get protection before you start paying solicitor’s fees, but you also allow plenty of time for the sale to go through without risking your policy running out.

Protect yourself with Home Sellers Protection Insurance for just £65

Am I eligible?

You are eligible for home sellers protection insurance if you are over 18 and the property is located in England, Wales or Northern Ireland and is a permanent construction. You must also use a solicitor or licenced conveyancer for the sale. Finally, neither you nor the buyer can have already carried out a survey on the property.

Home Sellers Protection Insurance covers a variety of properties. You can take out a policy and enjoy its protection if you are selling a house, flat, freehold or leasehold property. You can also protect the sale of a buy-to-let property too.

The financial position of your buyer also won’t affect your eligibility for cover. Whether they need a mortgage or are a cash buyer you will still be protected.

But it’s worth noting that to take out this insurance, the sale of your property must not be subject to a contract race or sealed bids.

What’s the best home sellers protection insurance?

The most important aspect of home sellers protection insurance is how much it pays out. You don’t want a policy that only covers part of your legal fees. The average seller pays between £610 to £950 in conveyancing fees. But fees can be much more. The best home sellers protection insurance will cover you for legal costs in excess of that amount so you can be confident your money is protected. Our home sellers protection insurance will cover up to £1,650 in legal fees.

Protect yourself with Home Sellers Protection Insurance for just £65

Home Buyers vs Home Sellers Protection Insurance

If you are selling your home and buying another at the same time, you may also be interested in Home Buyers Protection Insurance. Home Buyers Protection Insurance, also called Home Buyers Insurance or Gazumping Insurance can protect you in the event of being gazumped, or if the seller changes their mind.

Home Buyers Protection Insurance can enable you to claim back some of your conveyancing fees, survey costs/mortgage valuation fees and mortgage/lender fees in the event of the purchase falling through.

Our Home Buyer Protection costs just £69 — find out more.

Frequently Asked Questions