One of the reasons selling your home can be so stressful is the risk that the sale could fall through. This is likely to leave you out of pocket, adding to the expense of moving, and puts you back to square one with finding a buyer. You could even miss out on the home you’re buying.
The risk is real – data from home buying company Quick Move Now shows that 29% of sales fell though in 2024. In the majority of these (27%) it was because the buyer pulled out or couldn’t renegotiate the purchase price after getting the survey results.
If this happens to you, you’ll lose any legal fees you’ve already paid to your conveyancer. The average fees sellers pay in 2025 is around £814 according to home moving services comparison site Compare My Move. Taking out home sellers protection insurance can protect you against this loss.
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What is home sellers protection insurance?
Home sellers protection insurance pays for any legal fees you lose as a result of a sale falling through. It covers you if an unexpected event results in the sale collapsing. You could have already spent a significant amount on legal fees up to this point. If you have this insurance, you’ll be able to make a claim to recover the money.
How does it work?
Home sellers protection insurance is optional but it gives you peace of mind that you’re protected against some of the financial impact if your sale fell through so is worth considering.
You can take it out once your home goes on the market, preferably before you’ve incurred any legal fees as anything you’ve already paid won’t be covered. If the sale falls through, you make a claim. As long as the circumstances are covered by your policy, you’ll get your legal fees refunded up to a set limit. This could be up to £1,650 depending on the policy.
As with other types of insurance, the policy is valid for a limited period. Some cover you for 120 or 180 days, while others for as much as a year. Once the policy expires you can’t renew or extend the policy for the same sale.
What does home sellers protection insurance cover?
The insurance covers you if your sale falls through for a range of reasons you couldn’t have foreseen. These include:
The survey results uncover structural issues that make the buyer decide they don’t want to buy your home anymore. The cost of repairing these issues or the reduction in the property’s value may have to be at least 10% of the purchase price for you to be covered
Searches reveal information that puts the buyer off, such as planned development near the property
The buyer’s mortgage valuation values the property at less than 90% of the offer price
Health issues or redundancy mean the buyer has to pull out
A relocation by the buyer for work is no longer happening, which means the buyer has no need to move house
The death of your buyer
Exactly what’s covered and any conditions involved will vary depending on the policy, so check the wording carefully before you take out the insurance.
What doesn’t it cover?
Generally speaking, anything you knew about before you took the insurance out and anything you do yourself that causes the sale to fall through isn’t covered, such as:
The buyer pulls out because of problems with your home you knew about. This could be because a previous survey revealed issues
You decide to take your home off the market
You take voluntary redundancy so can’t move house anymore
Your behaviour or actions result in your buyer changing their mind about the purchase
You also can’t claim for any money that’s refunded when the sale falls through or that you can get back in other ways, such as through a different insurance policy. Some policies won’t let you claim if the issue that causes the failure of the sale happens within 24 hours of taking out the policy.
There could be other exclusions, such as claims due to your property being in a flood risk area.
Who is eligible for home sellers protection insurance?
You have to be 18 to take the insurance out. The property may have to be in a specific part of the UK – some policies only cover you if you’re in England or Wales while others cover Northern Ireland too. It also has to be a permanent structure.
Sales in Scotland aren’t eligible as the home buying process is different there. Business properties aren’t covered either.
You can’t usually take the insurance out if you or the buyer has already had a survey done on the property. You also won’t be able to if your home is being sold using sealed bids or a contract race, which means you accept two or more offers and sell to the first buyer who is ready to exchange contracts.
You must be using a solicitor or licensed conveyancer for the legal work.
When should you take the insurance out?
You can take out the insurance as soon as you put your property on the market or within seven days of accepting an offer on your property.
Where should you take it out?
Home sellers protection insurance is provided by specialist insurers you probably won’t have heard of. While you may be able to take a policy out directly from the insurer in some cases, the companies you’ll find online are often brokers that sell policies from one or more insurers. Alternatively, you may be able to buy a policy through your conveyancer or estate agent.
How much does home sellers protection insurance cost?
According to Compare My Move, the average policy costs £66. There’s no excess to pay if you claim unlike with most other types of insurance.
This would be well worth spending if you ended up losing your legal fees as a result of your sale falling through. However, there are a number of conditions and exclusions that apply to these policies, so make sure you know exactly what you’re covered for before you decide to take the insurance out.