You’ve recently celebrated a reservation agreements milestone - can you tell us a bit more about this?
We are over the moon to reach the milestone of having 100 reservation agreements in force. The property system in the UK is broken, with almost a third of sales falling through. In our opinion, more agents up and down the country should be offering, or even mandating reservation agreements, to give all parties involved in the transaction added peace of mind and security.
What are the main benefits of an agent using reservation agreements? To anyone still sceptical, what would you say?
There is currently nothing within English system to suggest you can’t pull out of a transaction at no cost. This can cause unnecessary upset and stress to all parties that are involved, so by having a financial commitment to one another helps to prevent the chance of this happening.
Something I’m really keen on with Gazeal are the ‘Buyer information Packs’ that are provided. At the point a property is put on the market with us, checks are done for the title deeds and the land registry documents. Clients are then also asked to fill out TA forms such TA6 and TA10 (TA7 if the property is leasehold).
These forms make up part of the ‘Buyer information pack’. At the point a viewing is made, buyers are made aware of all this information so that they are better informed at the point of offer.
Can you give us a quick lowdown on Knight Edmonds? Your size, the area you operate in, how long you've been going for, etc?
We are a fairly new company. Alex and I launched the company at the beginning of March 2020. Three weeks later we went into lockdown and were questioning what we had done, but we are going from strength to strength and now have 10 employed staff at Knight Edmonds.
We currently operate out of a serviced offices, where we have already found ourselves outgrowing each room. We’re currently in our fourth office. We have recently secured a premises on the high street in Maidstone which is arguably the most prominent position in the whole town, which we are really excited about.
Do you think the use of reservation agreements will become much more widespread in the next few years?
They certainly should become more widespread. Giving both sellers and buyers security during a transaction is critical. We have a meeting lined up in a few weeks with Gazeal and the government to discuss whether reservation agreements should be written into law and become a standard part of buying and selling houses.
And now Chris Ellis, who owns Harrisons Homes in Sittingbourne, Kent.
You've just recently reached 100 reservation agreements - can you tell us more?
For us as a company, this all started in the first lockdown and we were looking at ways in what and how we can improve our service as a company, and the final part was looking at how we can offer more security to our customers.
When we set out to offer this service, we didn’t really have any milestones to achieve, other than offering more security to our sellers and buyers. Although, when we were edging closer towards the 100, I then started to realise what an achievement it was that we hit this milestone in a relatively short timeframe.
We’d offered something that wasn’t the normal within our industry unfortunately, however we knew that our sellers would have a committed buyer from the outset, and they’d made a financial commitment. Meanwhile, the buyers knew that our sellers were fully committed to them as a buyer and wouldn’t entertain gazumping them.
It’s surprised me how many sellers/buyers this appeals to as they have been let down one way or another due to the points highlighted below.
Why do you believe reservation agreements are good for the industry?
From a personal view, our industry has a poor reputation and, yes, it’s understandable from one side of the equation as there have been poor agents that are only interested in lining their own pockets.
However, the law as it currently is, is enabling poor practice within the industry and it’s easily allowing people to change their mind or allowing gazumping and gazundering to happen.
I’ve been saying this since I joined agency 18 years ago and there needs to be a change in the housing process. There needs to be more transparency, along with security to both buyer and seller. In my experience, we have buyers that make offers on properties and then withdraw a week or so later as something better has come on that they prefer, or they go several weeks/months down the process and then, when it’s close to exchange of contracts, they reoffer or withdraw altogether.
This isn’t right and we have people’s lives we are dealing with. It is an emotional rollercoaster. In the same instance, we have sellers that withdraw because they are still attached to the property or it’s just not right. However, again, this isn’t fair on the buyer as this could be their dream home and it’s been withdrawn at the same hurdle.
I can somewhat sympathise with some on the reasons, however, there needs to be a commitment as it’s not fair on all parties involved. It’s unfortunately a stressful/emotional experience the majority of the time, and there needs to be a change to alleviate the issues mentioned and make it a more enjoyable process.
Can you tell us a bit more about your tie-up with Gazeal?
I knew Bryan at Gazeal before on a personal level and we’d shared the same views about the housing process, so when he came to me and said I’ve something that you’d be very interested in, I knew it was for us.
They’re also doing our AML checks from both sellers and buyers, so this keeps it nice and easy and under one roof, rather than several companies, which helps.
What also helps and is part of the agreement is including the necessary forms which are provided by Gazeal (TA6 property information form and TA10 fixtures and fittings). We ask our sellers to complete these before we go to market so this helps my sales team be more informed about the property when showing prospective viewers around the property.
It’s also being more transparent with buyers at the viewing and offer stage, so they are fully aware before making an offer.
We have brilliant relationships with our account manager Louis and relationship manager Lera, who I feel have become extended members of our team.
Would you encourage other agents to use reservation agreements to improve the industry as a whole and make fall-throughs less likely?
100%! We have a 4/5% fall through rate which we are very proud of, when the national average is around 30%, so this has to be a contributing factor with how we are agreeing deals. The majority of fall-throughs we had were NOT on a reservation agreement.
It’s helped us a lot in who we recommend as a buyer to our sellers, as we have found ourselves in the same situation time and time again this year, where we have several offers on a property. However, when we have asked them to commit financially to the transaction and enter into a reservation agreement, not all parties want to do so, so from our point of view it raises the question - ‘are they serious?’
As I’ve mentioned above, I strongly believe this is a massive step forward in improving the buying/selling process and believe this should be something that is fully introduced within the sector.
*Bryan Mansell is co-founder of Gazeal