A buyer whose house purchase fell through at the last minute is to launch a pre-exchange bond coupled with an online service where buyers, sellers and agents can communicate.
Tim Price has been working on AssuredSale all this year.
He lost out when the vendor of a house he had agreed to buy pulled out one week beforehand.
Price had already had a survey done and had legal and mortgage fees to pay. He says he was amazed to find that a verbal offer is not binding and that almost one-third of transactions fall through with no protection for buyers or sellers.
He proposes that the bond, typically between £1,000 and £2,000, is handed over when a verbal offer is made and accepted, and returned on completion. The bond meanwhile is held by the Cooperative Bank.
A beta version of the concept is being trialled by Clement Estate Agents in Hertfordshire.
You can read more here.
https://www.thenextweb.com/uk/2011/10/07/how-assuredsale-plans-to-disrupt-the-uk-housing-market/
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Comments
So - I guess the answer is "no difference", then... ;o)
OKAY - that is fine. From what you state you seem to make it work - and if it works why change it? I'm not knocking RWA, by the way - you have done the job at that point so if vendor pulls the plug then they SHOULD be accountable at least for the proportion of fee tup to that point (which as we all know is indeterminable...).
You are a VERY different person to that who only a few months ago was vastly underestimating his success rate and bemoaning the competition for their "stack 'em high" business models.. .
I like the 'new' Chris MUCH better! ;o)
PeeBee, if a business offers a service and that service requires the customer to sign a contract before work can begin, the customer has a choice. We always explain our contract and there is no small print. If the customer is not happy with it, we will walk away.
Our business contracts and deposit scheme contracts have been designed to minimise risk to us and both sets of customers (Buyer & seller) from a change of mind.
Most estate agents are scared to rock the boat too much incase they see a drop in instructions/ vendors, which could see a drop in sales. As we survive on reputation due to the quality of our marketing & service, we often find ourselves having too many possible instructions and are unable to deal with everything coming our way. We are then able to raise the bar with tighter contracts, rejecting property in certain difficult areas, rejecting vendors wanting multiple agency, rejecting repos with low 1% fees and higher workloads, rejecting vendors that want too much for their properties. By cherry picking, we can focus on good quality stock on tight contracts, using deposits with buyers. Our listing to sales ratio is up around 70% and our fall through rate is down to around 6% compared to average ratios of 20% (Listings to sales) and 30%. (Fall throughs)
Agents should stop spending all their time chasing new instructions and work better with the instructions they already have. When those customer realise that their experience was better than anything else they have ever had, they will recommend that estate agency to their friends and family and the cycle continues. :-)
Chris: What is the difference between your Agreement and a "Ready, Willing and Able" Agreement (apart from the wording, of course...) that consumer groups so despise and recommend that no-one should enter in to?
We have been operating a more secure service for over 2-years now, which has cut our fall-through rate down to 6%. :-)
First of all, who said that no-sale, no fee hinges on the date contracts exchange? We modified our contracts 2-years ago that states that our fees become applicable once the vendor accepts an offer from someone able to proceed. If the vendor drags his/her feet and the buyer evertually walks away, or the vendor cancels the sale, we would send the vendor an invoice for our full fees!
We also ask the buyer to put down a deposit (Minimum £300 on a cheap £60k property but up to £5000 on a £300k + property) The buyer signs a contract here in the office, which entitles them to get their deposit back should the property be down-valued, be found to be structurally defective etc. else they would lose their deposit.
In putting a deposit down, the vendor agrees to take the property off the market and accept no other offers from anyone else.
Any money received goes into our client holding account where no interest is earnt by us. Occasionally, a vendor might threaten to cancel the sale, but once we remind him/her that he or she would still have to pay our fees, they re-focus and the sale goes through.
Obviously if the buyer walks away, they are not obliged to pay our fee, but then the vendor and ourselves split the deposit 60/40 in the vendor's favour and we start again.
What we are doing is perfectly legal and above board. Messing about with bonds, being held by third parties is a joke if you ask me. We are already one of the only industries in the UK that receives our fees through a third party. We need to grow up, start taking control of our industry and remove some of the risks that cost us and ultimately our customers a lot of money!
£250 quid AC?
I wish
A cracking idea doomed to failure.
The psychology of the average vendor / buyer will make this fail.
They won't even pay for a good (I stress the word good) agent to do a good (ditto) job for them.
The practicalities of the successful sellers paying the fees for all the unsuccessful ones means that any home owner that sells is paying 4 times as much as they should.
We have a completely screwed up way of charging because of the "no sale, no fee" basis of agency.
Putting a house on the market costs an agent about £250.
Doing viewings about the same.
Advertising - ditto.
If all owners paid a chunk up front that would mean we could charge successful sellers MUCH less.
But they don't want it.
Likewise they won't want this either.