Column from EDP Property News (27/10/2017)
Column from EDP Property News (27/10/2017)The Department for Communities and Local Government is launching a consultation on how to make to make the house buying process simpler, faster and less stressful. Changes could include possible financial penalties if a buyer or seller pulls out of the agreement without a good reason, tighter controls for estate agents with mandatory training for those in the profession following fears customers do not know how to complain about unacceptable behaviour by agents and ways to stop gazumping and gazundering. As you may have read in the supplement last week, gazumping involves the seller pulling out of a deal in favour of a higher offer from another party, and gazundering where the buyer threatens to pull out of the transaction, usually just to the point of exchanging contracts, unless thousands of pounds are knocked off the purchase price. Neither is palatable, but we as agents are required by law to put forward all offers until an exchange of contracts has taken place. The seller is selling ‘subject to contract’ so can change to a new buyer if they so wish. As agents, our duty in law is to the seller, so we should act in their best interest. Nothing is certain until an exchange has taken place – not ideal by any means.
In my opinion, gazumping and gazundering are the symptom of a process which is just too slow. I was in our Sheringham office earlier this week and a lady walked in and enquired about a bungalow she was interested in, having noted it had been under offer for some while. My colleague suggested we take her name and contact information in case the sale fell through, and back came the response “I could guzump the buyers then!”
Change is definitely required, evidenced by a quarter to a third of transactions failing. While disliked at the time, Home Information Packs, introduced in 2007 by the Labour Government, provided upfront information to include an energy performance certificate (EPC), local authority and drainage searches, title documents, property information questionnaire and sale statement. Further documents, such as a copy of the lease, building insurance policy, recent service charge and accounts etc. were required for leasehold property. HIPs were scrapped in 2010 (except for the EPC) by which time many of us had seen the value of a slicker process.
Part of purchasing a home will often involve a mortgage from a bank or building society and I recall the Council for Mortgage Lenders a few years ago promoting the idea of a common mortgage valuation across lenders to speed up the process. Certainly talking to our chartered surveyors, this has not materialised despite the requirement of turning round the mortgage valuation the same day and certainly within 24 hours of accessing the property in question. Our surveyors are using tablets out in the field and part of their valuation includes justifying the value by analysis of comparable properties to support the agreed sale price.
My colleague recently carried out a Home Buyers Report for a purchaser later in the afternoon; finished his report during the evening, emailed the same via his support team first thing the next morning, who pushed it onto the client, who subsequently spoke to our surveyor at 10am that morning with a few questions! Speed is certainly achievable when technology is utilised fully.
Back in the recession of the 1990s, we acted for a major building society selling property that had unfortunately been repossessed. Whilst these were empty, so there was no onward chain of sellers and buyers, a stipulation of the purchase was exchange of contracts must take place within 28 days of the contract documents being received by the buyer’s solicitor, otherwise the property would immediately be remarketed. Virtually all of these sales went through within the timescale, and this was well before the availability of technology available these days. Maybe we just need to keep the process simple?
Introducing some form of penalty for pulling out of a sale or purchase could be very involved. I believe any self-respecting estate agent would welcome better regulation of our sector. Licencing and qualifications to be licenced would be the ultimate answer to controlling practicing estate agents. Those who don’t follow the rules could then be banned from trading.
Currently, NAEA Propertymark, the leading professional body for estate agency personnel is dedicated to the goal of professionalism, with the aim of reassuring the public that by appointing the NAEA Propertymark protected agent to represent them, they will be safeguarded and receive the highest level of integrity and service for all property managers.
As published in the EDP Property News – Fri 27 October 2017
https://www.edp24.co.uk/edp-property
