The first UK residential sale where offer, acceptance and legal exchange all take place within minutes of each other online could take place this year.
The prediction has come from a commercial estate agent, who has himself now clocked up over £50m of property exchanges online – all achieved using his own software invention. He says that actually transacting properties online is the next revolution for agents following the universal marketing of homes on the internet.
The first likely residential users, it is thought, will be buy-to-let investors and cash purchasers looking to close deals quickly.
At the heart of the system is that acceptance of the offer creates an instant exchange of contract – at a click of a button. Both the buyer’s and seller’s solicitors will already have done full due diligence.
Neil Singer says that the process cuts out fall-throughs, is quick and decisive, has posed no conveyancing problems for solicitors, and deals with money laundering concerns – and that there is no reason why residential agents cannot use the same method.
Singer, of Singer Vielle in London, initially developed software to handle online exchanges in his own business. He has now developed it for the residential property market and says that he has one large chain at contract stage, although he thinks that it will be a London independent who will get there first.
Singer said that the main issue he has come up against in talking to residential agents about his proposition, called Clicktopurchase, is that they tend to be protective of traditional practices – and are sceptical of change.
Singer said: “There is massive protectionism among agents, but this has to be the way forward. It is a natural and logical evolution in house selling. After all, the mortgage industry now operates almost entirely online.”
He also says that agents elsewhere may beat UK agents to it, with Clicktopurchase about to launch in South Africa, and negotiations going on in Ireland.
With the system, as used by Singer himself, properties are put on the market, flagging up an online auction in, say, four weeks. Bidders are not able to bid beforehand. The bidding itself typically takes a matter of minutes, just as in a ‘real’ auction.
Singer said that in his own business, the number of online exchanges passed the £50m mark with the sale of a commercial property in Doncaster for £3.6m.
In another recent sale, of a commercial property in Huntingdon, five bidders submitted online best offers by an 11am deadline. The highest was accepted and exchanged minutes later, at over £1.5m.
“Passing the £50m barrier has shown that property trading can be done online, as in other industries and for other commodities,” he said.
Singer explained: “I decided to try and develop an online execution for selling property – it seemed an obvious necessity given the way all businesses are moving online.
“No one had created a way to exchange a private treaty property contract online. I managed to do so and launched Clicktopurchase as a plug-in to my own business.
“I also wanted to create an online auction – however, not the Ebay style which has been tried many times and always failed, but one which totally emulated the ballroom experience but online. This is a second feature of Clicktopurchase. Thirdly, I wanted to add in the ‘best offers / sealed bids’ online.
“For the residential market in particular it offers speed, flexibility, transparency and accountability – when someone makes a Clicktopurchase offer, it is as if they have placed a signed contract on your desk for you to then sign for the vendor.
“So, when accepted, an immediate exchange occurs – no gazumping, and certainty for both parties to exchange a contract. It allows for conditionality for finance in order to cater for cases where mortgages are required, although I see this first being adopted where selling to residential investors and cash purchasers.
“At Singer Vielle, it has been used by the likes of Deloitte acting for Lloyds Banking Group, Anglo Irish Bank, UBS, etc.”
Singer emphasised that Clicktopurchase is not a property portal, but a software platform white labelled to each agent’s own business. Costs work out at about 5% of the agent’s fee.
A short and simple explanation can be seen using the link below, and we would be interested in readers’ views.
https://www.youtube.com/playlist?list=PLrDn3-dBHTA3nWqYmM8XdtBAyTuLPZXse
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Comments
wow couple this with a tiny for sale sign and the jobs a good un!
It's not unique. It's the Scottish system
Interesting stuff. The devil will be in the detail. Neil if you want to explain further (from the conveyancers point of view) please let me know, rh@boldgroup.co.uk.
We exchanged on a house in 5 mins today..it did take 6 weeks for everyone to do due diligence though.....
"Does it work - well £50m has been sold so far in the commercial market."
Hmmm... when you take THIS from the original story above into account:
"...the number of online exchanges passed the £50m mark with the sale of a commercial property in Doncaster for £3.6m..."
then you're exactly looking at huge numbers of transactions as your proof of pudding - are you, Mr Singer? Not to mention the fact that these are COMMERCIAL deals - not three bed semis!
Take care - or you may end up as the next Mr Hendry in terms of believability.
And trust me - you REALLY don't want THAT to happen!
How does Clicktopurchase deal with Money Laundering?
An estate agent needs to satisfy normal money laundering requirements when taking on an instruction. Clicktpurchase doesn’t change this – remember, CTP is a transactional platform white labelled for the agent. It is a tool; it doesn’t replace the agent but brings proven speed, transparency, accountability and flexibility to the service.
When it comes to a purchaser, before the estate agent provides the "bidder" with the ability to submit a Clicktopurchase offer to treat by private treaty or auction, the "bidder" is automatically taken to an online verification form. This form asks for the identity of the “buyer” and the UK solicitor acting for the buyer. A message is dispatched to the solicitor with a certificate asking for confirmation that the solicitor’s client is who they claim to be. The solicitor signs the form and returns it to the agent. One can check the authenticity of the solicitor on the Law Society website. Then the estate has cleared the identity of the “buyer”. This is a proven fast and simple method, having been adopted through Clicktpurchase by banks, institutions, receivers and property companies.
Easy.
Why not see "How it Works": http://www.clicktopurchaseproperty.com/Pages.aspx?page=How%20it%20works
Is it legal? £50m of sales later proves the point. However, to explain:
Clicktopurchase was developed to create a solely electronic method of exchanging contracts for the sale and purchase of real estate.
The Law of Property (Miscellaneous) Provisions Act 1989 requires a contract in writing for the sale and purchase of land to be signed (other than for public auction). Clicktopurchase’s highly technical interface allows a party to “digitally” sign an electronic message by encoding it with a unique algorithm, whilst also demonstrating an authenticating intention. For these reasons, the encrypted signature satisfies the definition of “electronic signature”.
So, a Clictopurchase contract complies with the 1989 Act because:
(a) it is “in writing”. A contract existing only electronically constitutes a contract “in writing”;
(b) it incorporates “all the terms” in one (or each) document. The Memorandum of Sale automatically produced following a concluded “CTP” transaction makes reference to “The Conditions of Sale” which are held within the data room for each property;
(c) it is “signed by or on behalf of each party to the contract”: The Memorandum of Sale automatically produced following a concluded “CTP” transaction contains electronic encrypted signatures unique to the seller’s instruction and to the buyer’s bid. It is our view that these electronic signatures satisfy section 2.
unlike stuff on ebay, property contracts have to be evidenced in writing, exchanging contracts as suggested isn't legal is it?
how will ml obligations be covered by this service?
This will never happen with all the property chains.
Richard, Clicktopurchase provides uniquely for an online private treaty contract exchange - so someone wishing to submit an offer makes a binding offer to treat online, putting their money where their mouth is. If the offer is accepted, an immediate legally binding online exchange of a property contract occurs. It also has the flexibility to switch at any time to a real time auction, with a live auctioneer interacting with the bidders, or a "best offers" online. So, it is not an auction platform, but offers auction capabilities.
A full legal package is online - a purchaser should ask their own solicitor to review the documentation. When an offer is submitted by a verified bidder, it is as if they have signed the contract or put their hand up in an auction room.
Does it work - well £50m has been sold so far in the commercial market.
Finance - offers can be made with completion conditional upon finance, if the vendor chooses. But the offer doesn't need to be accepted; but if the vendor does so, a contract exchange occurs, a deposit is paid and you have two committed parties. Better than a mere exchange of an estate agent's letters.
Any questions, let me know.
Neil
Exactly. What is the difference between this and an auction. Two parties with no finance involved and all searches and enquiries in place. Great idea if the buyer is ready and providing you are happy not to use your own chosen conveyancer and rely upon the advice from someone you have never met or heard of.
Nice idea for a tiny part of the market but no revolution.
Isn't this what HIPS and pre-sale surveys were meant to do???
Sounds like an auction website.....
great idea love it