LEGAL
Losing the plot: Buyers
With Elmhirst Parker Solicitors
They say home is where the heart is. That is until it’s time to pack up and move in search of somewhere new – then it becomes home is where the stress is.
As the biggest financial transaction most of us will make, buying or selling a property is bound to be wrought with emotion. But when things don’t go as planned, it can become one of life’s most stressful experiences.
A rise in tactics such as gazumping and gazaundering - whereby sellers accept a higher offer at the last minute or buyers reduce their offer following property surveys – not only cause crushing disappointment for the opposite party, but can also leave many out of pocket through non-refundable fees they have already paid.
Towards the end of last year, Secretary of State for Communities and Local Government, Sajid Javid announced plans to make buying and selling homes cheaper, faster and less stressful in order to make the housing market work better.
Part of his plan is to clamp down on said gazumping tactics; but will this prevent bad property behaviour?
The conveyancing process is often criticised as not being the most consumer-friendly, often regarded as inefficient and ineffective. It is true that over time it has become a more complex and time consuming process, with many finding costs have risen due to the extended basic requirements needed to complete a sale.
But while most blame the conveyancer or solicitor when things go wrong, this can also be unjustified and perhaps down to unrealistic expectations or lack of understanding surrounding the process.
The current conveyance process dates back to the 1920s with little having changed in almost 100 years. Solicitors, surveyors and mortgage companies also face endless red tape throughout.
When you’re looking to buy or sell, the first point of call is an estate agent rather than a solicitor.
You see a property you like, make an offer which is either accepted or declined by the seller. Then it might seem to some that it all goes pear- shaped or feel sluggish, resulting in a stress- riddled process before you even get the keys.
However, because anyone can set themselves up as an agent, defects in the deeds or paperwork may not necessarily come to light at first, meaning some properties are not always fully ready when they come on to the market. Around a quarter of sellers would use a different
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www.elmhirstparker.com
kgrandidge@elmhirstparker.com agent if they went through the process again.
While there are around one million successful transactions every year, there are also around 200,000 house sales that fall through due to various different reasons.
House sales are not just plagued by lack of paperwork; some offers are made from people who don’t have the means to buy and so this causes uncertainty until the mortgage offer is approved.
Although mainly a consumer to consumer process, there is often very little interaction between both parties. This can result in low levels of trust being displayed, with 46 percent of sellers concerned that their buyers would change their mind after making an offer.
When you are part of a chain of properties, you often find the process adds even more stress as it only moves at the slowest link’s pace. While you’re all joining the train and heading for one destination – completion – some lose patience, get delayed or have to depart early.
These delays not only cause additional costs, but leave one in seven sellers and one in four buyers not achieving their completion date; 69 percent of sellers and 62 percent of buyers reported delays in the process which added more stress and worry.
Unlike in Scotland where they use sealed bids to guarantee early commitment, sales don’t become legally binding in England and Wales until written contracts are exchanged which is relatively late on in the process after surveys, searches and mortgage offers have come back.
This means buyers are not legally obliged to put down a deposit when making an offer and so can back out at any time before the exchange of contracts which is often weeks or months later.
However, by changing the system as Rt Hon. Javid is suggesting, this would perhaps become unpopular with sellers who would have to take on the costs of the legal and survey fees normally paid by the buyers – equating to around £1,000 per sale.
How to keep a happy medium:
• Act quickly – It’s unlikely you’ll have all the elements in place when you first make an offer, but acting quickly for time consuming checks and surveys can save you hassle down the line.
• Mortgage in principle – It may seem obvious but a mortgage agreed in principle, or a conditional offer from your lender, speeds up the process and proves you are committed to buy.
• Conveyancer – Find a solicitor in advance and get quotes as soon as you start looking at the process. It also helps to be prompt getting fees together so they can transfer or deal with surveys etc ASAP.
• Off the market – Ask for the property to be taken off the market as part of the offer. If they know you’re serious and ready to move quickly they should be willing but are under no obligation to do so.
• Lock in agreement – This is a preliminary, binding agreement whereby the seller agrees not to negotiate with other parties during a fixed period. Both agree to pay a deposit, usually two percent, which would forfeit if they pull out.
• Insurance – Covering any losses in the event of being gazumped helps further minimise risks.
and sellers behaving badly
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