x
By using this website, you agree to our use of cookies to enhance your experience.

TODAY'S OTHER NEWS

Sellers losing thousands because of fall-throughs says group

One in five sellers suffer a fall-through costing them an average £2,700 - but many lose £5,000 or more.

These are the findings of consumer group HomeOwners Alliance, which says over 300,000 property transactions collapse each year, in large part due to buyers pulling out of the deal. 

Overall, more than two thirds of sales that fall through do so because a buyer changes his mind or finds another property, or because of a mortgage problem. 

One in 12 sellers claimed they’ve suffered a failed sale because of gazundering, where the buyer lowers their offer just before the exchange of contracts.

The group claims that many prospective sellers put off marketing their home because of the fear of a chain breaking down - and almost a fifth say they won’t put their home for sale because they fear in the current market they won’t get a price they want. 

The research also shows almost one in four sellers having six or more different people view their home before finding a buyer, although the average number of viewings is just under five.

The research comes after the government announced plans to improve the home buying and selling process with a number of measures, including the introduction of voluntary reservation agreements. 

These legally binding agreements - supported by the HomeOwners Alliance - would require both buyers and sellers to put down a non-refundable deposit to commit both sides earlier in the process.

“Gazundering and time wasting is a huge problem. The home selling system is so unreliable it’s deterring homeowners from selling – adding to the ongoing housing shortage crisis as a lack of suitable homes is one of the barriers to people moving up the property ladder” claims Paula Higgins, HOA chief executive. 

“Buyers need to have a little more skin in the game too. An earlier commitment – for example through reservation agreements – would go some way to avoiding these situations” she insists.

  • Richard Rawlings

    Sales fall through because of the ridiculous delays specifically caused by old fashioned solicitors, and agents who don't have the guts to refuse to work with them. Also, if a buyer is prepared to commit on exchange, then why not on offer acceptance, like virtually everywhere else in the world? I have been using binding contracts for many years and they work a treat. Or take if further and use the Gazeal service - where deposits are held in Escrow. PS I won't be replying to the people I predict on this blog will have all sorts of reasons why you can't do binding contracts. You absolutely can. Good agents have a can-do attitude, they employ creative solutions, and their fall-through rate is usually less than 10% . Have a great day!

  • Peter Ambrose

    Old fashioned solicitors are only a part of the problem.
    Its the incompetent firms that employ under qualified staff running literally hundreds of files.
    This, as you know, Richard, is caused by short sighted owners of agencies who are happy to accept the panel managers bribe in return for knowingly poor service.
    The stories we here from employees who come from these disgracefully run law firms firms are nothing but shocking.
    New low last week, one of our new lawyers was covering some work for a friend as a favour. He had to sort out a mess of paper files of over 300 cases by himself.
    No wonder deals fall through.
    The ones who need the guts are the law firms who refuse to be bullied into taking such bulk work without the wherewithall to actually do it.
    Happy Monday everyone!

  • Grahame Hopper

    The Scottish method is much better. Once missives are concluded, both parties have committed to the deal.

  • Richard Rawlings

    Legal pack up front (helps you get the instruction), all required verifications and contract signatures on day one, title/search insurance, binding offer, and a lawyer who will pick up the phone should be able to knock weeks if not months off the process.

  • Steve Dawkins

    Thank you for the positive comments Richard.

    I was just reading the article and was pleasantly surprised to read constructive comments.

    The fall through rate seems to be increasing and the call for evidence has highlighted the benefits of legal packs up front and the use of reservation agreements in the right circumstances, therefore, I believe that a tweak to the process will benefit all parties.

  • Jon Horton

    We have evidence that delays in the process inevitably heighten the chances of buyers getting cold feet and pulling out. An area of delay is when conveyancing searches are committed to and it is often the conveyancer who creates a delay in this area by not wanting to spend their clients money too early on the process. Ironic that this in itself can create the very delay that creates a risk of a transaction falling apart. Good communication between all parties, together with early commitment to get moving will reduce fall through rates. HIP's - yes i could see this being re-tabled with lessons learnt from the past.

  • icon

    There seem to be too many buyers pulling out recently, and early on, and quite frankly, I question how well vetted they have been.

    With estate agents under massive pressure on commission rates, I do hope 'hey we have a buyer, keep them, we need the commission' is not the attitude that is creeping in. A buyer is not a buyer unless they are serious/committed.

    THEN the next culprit is the slow mortgage adviser, and the slow mortgage lender.

    Searches? Come on, they play no part now, we act across England & Wales and they are never a factor - might help that we don't wait for money on account, saving 2 weeks, but still.

    IN PARALLEL we then have the inferior conveyancers, who are rife. Back in part to the Estate Agents who want a cash bung rather than caring if they are bringing on board a sluggish conveyancer. Personally, that happens too often from the high street national chains, and I cannot recommend them for this practice alone. I must see an estate agent aligning with quality professionals, or they are off my radar for working relations.

    Upfront packs? That is simply condoning mediocre conveyancers. Expert conveyancers don't need upfront paperwork, they are fast to prepare it, and fast to review it.

    Improve the conveyancer's actual quality - BUT no one is talking about that.



icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up