Playing Buyers At Their Own Game.

irnbru_2

lynzpower wrote:

How is it enforced? If your buyer pulls out do you sue them? Small claims type thing? What happens?

It's a civil claim. The claimant would seek damages as per any breach of contract i.e. for the losses incurred. It's expensive.

It only happens after the missives have been signed i.e. exchange of contracts.

Claire_DC

klaatu wrote:

It's one of the good things about the Scottish system. Unfortunately it means you really have to get your survey done before you offer. What can happen is that if several people are interested in a property, the vendor sets a closing date, and you submit your best offer by that date. If you end up not being the lucky winner, you've paid for a survey for nothing.

And yes, if the buyer or seller pulls out once the offer has been agreed, the other party can sue.

Steve

That could make buying a house even more expensive than it already is then lol. :eek:

I couldn't imagine having to pay for a survey on every property i'd like to make an offer on, without it even being guaranteed that i'd get the offer accepted especially. If it was like this here, then i'd have lost out on one survey cost as the first property that we were interested in and offering on went to a bidder with a higher offer.

I'm quite glad England doesn't have the same rules as Scotland in that respect, but i do agree.. buyers shouldn't just be able to offer on 4 different houses. They should decide on one, and then offer.. it's not like they're able to have all 4 anyway, so why not just choose the one you want before offering, it's not much trouble really imo.

Home info packs do seem like the best option if Scotlands home buying laws were the case in England also, at least then the info is there for buyers to see.. without having to pay to have the property surveyed with no guarantee that you'll actually get the offer accepted.

Debt_Free_Chick

A few observations ....

The one disadvantage with the Scottish system is that it's effectively a "sealed bid" auction. Making a bid equal to the offer price is unlikely to be enough. I read something somewhere that suggested the average price paid in Scotland is something like 130% of the asking price.

As well as buyers making bids that don't go to completion (back to England, now), sellers can also pull out for no reason at all - and the buyer is left to pay whatever costs they've incurred. In general, buying is more expensive due to the costs of the survey, searches, proving title .. not to mention any fee that might be paid up front to get a mortgage offer. So, it's not a one-way street and not just buyers who cause problems.

I see nothing wrong with buyers putting offers in on several properties. Indeed, some sellers have forced this situation by accepting an offer and then accepting another one for a higher price!

Buying/selling properties is essentially a business transaction, with the addition of a huge dollop of emotion if your buying/selling your home (i.e. not simply an investment property).

The next time I get an offer, why should I take my property off the market? Why should I cease accepting other offers?

No reason to do either. It used to be that an offer accompanied by a "subject to you taking the property off the market" was a sign of a serious buyer. If you've had more than one buyer do this and then change their mind, it's a bad sign - but nothing you can do about it.

And you can continue to accept other offers - but it leads to gazumping, which can't be prevented anyone. If you decide not to do this because you believe gazumping is immoral or unfair, there's no guarantee you won't be gazumped when buying ... it depends on the seller.

Tricky business ... you can only live within the system as it is - precious little we can do to change it.

Regards

deefadog

I think the £250 deposit idea would be a good idea, it would work both ways as well, because the buyers (if serious) will feel more safe that some sort of transaction has gone through at an earliy stage.

Even though i am part-exing (hopefully) I had to give baretts £250 for the survey they would do on y house for the valuation, if we ended up going through with this we would get the £250 back, if not we would only get £125back! - Is this right as it seems they are only covering costs in case we pull out!

courtjester

linlin wrote:

As the law stands in England & Wales, that (a deposit) can't be done. All contracts for property/land must be by deed.

QUOTE]

I don't think that is right - a non-refundable deposit can be lodged with your solicitors against expenses lost in the event that one party backs out of the sale - this is a consideration for asking the seller to take the property off the market (i.e to deal with the buyer exclusively which is highly one-sided as if the buyer decides not to go ahead after 6 weeks of working towards exchange of contracts, then the seller loses out on marketing time to other buyers).

My understanding is that the non-refundable deposit would correspond with the type of expenses involved, so would not be a percentage of the sale price (which is a deposit against deeds on exchange of contracts - something entirely different) but would normally be something like £500-£1000 but is negotiable as to what would be appropriate between the parties.

There would then be a simple agreement drawn up by the solicitor, so this is not associated with property legislation, but is a simple private contract to formalise the agreement that the property is taken 'off the market'.

After all, there is no legal effect to an offer that a buyer makes or the acceptance that a seller gives under the current English system and the introduction of HIPs won'tchange this either.

Many agents (and buyers) tend to pressure sellers into removing the property from the market on acceptance of an offer and this must be given serious consideration as this is one way of showing good faith as a first step to securing a completed sale, which is by no means a sure thing. However, some buyers abuse the sellers good faith with this requirement. A non-refundable deposit is a way of bringing a measure of commitment to both sides.

Rimo2021

klaatu wrote:

It's one of the good things about the Scottish system. Unfortunately it means you really have to get your survey done before you offer. What can happen is that if several people are interested in a property, the vendor sets a closing date, and you submit your best offer by that date. If you end up not being the lucky winner, you've paid for a survey for nothing.

And yes, if the buyer or seller pulls out once the offer has been agreed, the other party can sue.

Steve

These days it's quite usual (in Edinburgh at any rate) to put in your bid 'subject to survey' then if your bid is accepted (usually but not always the highest bid) your solicitor sends in a surveyor pronto (usually the same afternoon or next day at latest) and firms up the offer. Either party can still pull out or change the offer at this stage until the missives are exchanged by the solicitors (usually a few days only though this has been changing a bit gradually allowing more room for messing around) at which point the contract is set in stone and costs are recoverable if either party breaks the contract..

Of course if you put in a bid 'subject to survey' and someone else puts in an 'unconditional' offer (having already had a survey done) the seller may well go with their offer even if your offer was higher so it all depends on how much competition/how keen on the property you are which route you choose.

Old_No.7

Re: buyers pulling out: As first time buyers we recently did just that. We put in an offer for a place, but as the owners were very unsure of whether they wanted to move (they'd pulled out once before) we felt that we couldn't risk falling behind on schedule (baby on the way) and offered on another (no chain) property as well. So rather than calling it "playing buyers at their own game" in our case, we were playing the sellers at theirs...

If we would have had to pay a deposit, we wouldn't have put in an offer until there was an indication of the chain and the sellers commitment to the sale: in this case: never as we ran out of time. We gave them over a month to make up their mind and find a property, then when they found one, it turned out that the owners of that property weren't sure about selling up either (messy divorce)!! So v.reluctantly we pulled out of that one, and went with the other property. The estate agent was v.understanding about it: we had specified the date we would have to complete by, so we were as upfront about it all as we could be.

We still had to pretend that we were fully committed to the other property though (the one we're buying now) and didn't feel comfortable with that at all. We discussed it and would not have done it had the other house not been a probate sale: if another (innocent) family is dependent on it all to move on, and you know you will have to pull out of one of them, we didn't want to have that on our conscience. I can see that not everyone would feel that way though: as FTB we weren't holding anyone up, and luckily we found a chain free option we liked almost as much. Next time we might be in a more difficult situation.

I agree with Lynzpower that the HIPs might have helped, in this case anyway: at least both sets of owners paying for that would have shown some commitment before putting their property on the market.

sashacat

I would not take a property off the market until the survey was paid for. Twice recently my daughter's buyers have pulled out...on two different properties in two different parts of the country...and both times it was because the EA( who was selling our property to them) has shown them other property...in other words they were just trying to hold more than one property. I would never, ever take a property off the market until I had a financial commitment from the prospective buyer

PJD

Typical estate agents :wall:

I totally agree, & wouldnt take mine off either - the problem is, the estate agents stopped pushing my property once I accepted an offer last week :wall:

sashacat wrote:

I would not take a property off the market until the survey was paid for. Twice recently my daughter's buyers have pulled out...on two different properties in two different parts of the country...and both times it was because the EA( who was selling our property to them) has shown them other property...in other words they were just trying to hold more than one property. I would never, ever take a property off the market until I had a financial commitment from the prospective buyer

Debt_Free_Chick

sashacat wrote:

I would not take a property off the market until the survey was paid for.

But, as a seller, you wouldn't necessarily know when the survey had been paid for. When we bought our current house (3 years ago) we paid for a full structural survey and actually didn't pay the bill until it arrived ... about 3 weeks after the survey took place.

When we made our offer it was conditional on the property being removed from the market and the EA not allowing any further viewings (as we desperately wanted this house).

We paid 98.5% of the asking price. We were not in a chain. Would you have turned us down?