Transactions time – how long and how much of a diff...

Anyone working in residential property knows it is taking longer and longer to get from SSTC (sold subject to contract) to exchange. It was a problem before the pandemic and it’s a bigger problem now. It’s frustrating for clients but for businesses, specifically conveyancers and agents, it has a material impact on revenue.

It’s rare that a week passes without a press announcement from a business claiming to speed up transactions. Our own business, mio, is no exception and yes, it’s a statement we stand by. But there are some myths surrounding both how long it takes to get from SSTC to exchange and how easy it is to effect positive change. This can make it difficult for estate agents to identify the right solutions and evaluate the value they add.

Published data on transaction times is often based on information from the portals and the Land Registry with the clock starting to tick once the property is categorised as SSTC on the portals and stopping once the process is completed at Land Registry.

Herein lies the challenge. Using portal data to understand when a property reaches SSTC relies on agents updating their CRM systems and/or the portal as soon as SSTC is reached. Understandably, given volumes of work, this doesn’t always happen.

The transaction will then be defined as completed once Land Registry processing has finished. This is also misleading as it can take in excess of 30 days for the Land Registry to be updated. The update does not happen automatically on the date the purchaser gets their keys.

So how long are transactions really taking? Data from mio, supported by our own clients’ internal records, is averaging 108 days. The fastest transactions, excluding new build, are completing in under 90 days and the slowest over 150.

Naturally, there are huge variations as there are lots of factors, often outside of the agents’ control, that affect transaction times, most notably Local Authority Search turnaround times.

Whilst the limitations referred to above make it difficult to externally benchmark your pipeline turnaround, most agents will closely monitor timelines from SSTC to exchange, using tools like the mio dashboard. Right now, if you’re consistently achieving under a hundred days, you’re doing a great job and you should be shouting about it on valuations.

Understanding where the pinch points in transactions occur can be challenging due to the limitations of sales progression functionality in many CRM systems. Close monitoring of the milestones in mio makes it easier and planned enhancements to the mio reporting suite will bring further improvements.

Armed with this understanding, it should be easier for estate agents to take proactive steps to reduce delays but, it will for the foreseeable future, remain the case that there is only so much an estate agent can do to speed up a transaction.

The weakest link in the chain

Unless buyers are willing to move into rented, transactions will only move as fast as the slowest link in the chain. Fully qualifying the chain and monitoring its progress won’t always impact speed, but it will help manage pipeline forecast and client expectations.

Furthermore, as the software that delivers shared chain views evolve, the chain view should be enriched with data that makes early identification of potential challenges and accurate assessment of timelines easier.

All aboard……

Any solution claiming to make a difference to transaction times won’t deliver a meaningful impact unless it’s targeted solely at chain-free buyers and sellers, or it’s used by every party involved in the chain.

This is why collaboration is so important. If your business is using a great piece of software that could be used by other businesses, whether that’s agents, conveyancers or mortgage brokers, encourage them to get on board.

Yes, they may have to invest time in integration, but a few days spent on development effort now could make a very significant difference in the future.

Don’t undervalue efficiency gains

Good software, whatever it claims to deliver, should in the long-term always improve efficiency and those improvements should come within the first few months of regular use. A more efficient team should be a more productive team and that should lead to improvements in margin.

Focusing specifically on sales progression, compare the traditional way of progressing a sale deploying a blend of CRM systems, spreadsheets, paper files, post-it notes and your team’s memory with specialised sales progression software that drives every user through a standardised process, tells users what needs to happen next and provides centralised access for your entire team, and it’s not hard to see why it’s more efficient.

However, it’s hard to sell software based purely on a promise of improving efficiency because it’s not deemed suitably compelling and it’s difficult to accurately measure efficiency gains. So, to secure sales, software providers often find themselves having to ‘talk-up’ up their software claiming to deliver everything from an enhanced ability to win listings through to happier customers.

Those benefits can take months of consistent use to materialise and, in some instances, rely on the estate agent to articulate to the potential client why the software makes a real difference to their customer experience.

This can result in a disillusioned software buyer who believes the software is failing because it hasn’t delivered on the ‘big promises’ even if that software has helped to improve efficiency and business resilience.

Be patient and be realistic

Whatever software you’re introducing into your business, give it time to deliver; be realistic about what you expect it to achieve and be honest about the improvements you need to make in your business that can’t be delivered by software alone.

Software is not a substitute for poor people or poor management, but good software used by good people in a good business can make a world of difference.

*Emma Vigus is Managing Director of mio