The government should change the law regarding buying/selling

fart

propertyman wrote: »

Propertyfan is a dreamer, it isn't that way because for all its frustrations, it's the way it is for a reason, for the most, it works.

After all who comes to MSE to say " erm it all went fine, thanks"

The problems come from people
-Not being organised
-not doing some research before putting it on the market/buying
-not begin prepared
-insisting on conveyancing fees for less than a weekend away

And being more focused on lifestyle, kitchen and Ikea catalogs, blathering to their friends and "sourcing" than the biggest investment they will ever make and the home for their family.

The OP has been messed around by a buyer pulling out on completion day. He's upset because he's now out of pocket so far down the line.

Point is that with the Scottish system, the point at which you make sure you 100% want to complete the purchase is weeks and weeks earlier than this. He now wants a deposit because in his situation, he'd now have £1000 to bank to make up for his frustration. In systems like that in Scotland, the process wouldn't have gotten as far as it has purely because you're made aware upon offering that you're financially committed to buying the place if it's accepted, which completely negates the need for his (at best) shoddy new proposed system.

HAMISH_MCTAVISH

Propertyfan wrote: »

But I don't live in Scotland. So why you mentioning your system? The ENGLISH government is not going to adopt the SCOTTISH system so what is your point? .

Why not?

You'd have a far better system, that solves your problems, without needing to invent a new one from scratch.

Propertyfan

Propertyfan is a dreamer, it isn't that way because for all its frustrations, it's the way it is for a reason, for the most, it works.

I have been instructed by my legal team not to chat with Fart. However, I can post my messages to the rest of the people on this forum.

Clearly, for some people, it doesn't work.

I doubt you would like to sell your property to an individual who claims to be a cash purchaser with no mortgage, no chain, and seven weeks later you discover, after the buyer pulls out of the purchase, that he DID need a mortgage. Not only did he need a mortgage, he couldn't get his buy-to-rent mortgage from the bank and was seeking a drawdown mortgage - which involves a different set of conditions.

Due to the current system which seems virtually unregulated I was not told to get a letter/email from his solicitor to confirm his purchase status - whether or not he needed a mortgage, and because there is no legal requirement for mandatory deposits - as I've suggested - the buyer pulled out after seven weeks of the conveyance and I can't claim anything for time wasted, needless extra expenses and grief! The buyer, his EA and his solicitor colluded to hide the mortgage from me and also made no effort to put any details of his purchasing status down in a letter or email. I've learned from this complete lack of transparency. Any future sale of my property is dependent on the buyer's purchase stats put down in writing.

So I'm hardly "a dreamer" for suggesting some changes to the system.

Mandatory deposits would mean I, and all the other potential sellers out there in the UK and Wales, have some safe-guard. Sure, the deal can still fall through, the buyer may be misleading you regarding their finances, perhaps they've changed their mind or found a better, cheaper property elsewhere; there could be endless reasons why someone wants to pull out of the purchase - but at least you know you get to keep the deposit.

The entire process can be summed up quite nicely

"If you can't pay the deposit, you can't pay for the property."

Everyone knows where they stand.

If a potential buyer loves a property, has their mortgage ready, or has the full cash sum ready, but is moaning about having to pay a small (relative to the sale price) sum to secure the property, it's a petty complaint. The deposit should be less than 1 percent of the sale price so if the buyer is moaning "why should I spend money before I get the property" then they're being unreasonable. The seller doesn't know much about the buyer. The buyer could be the most honest person you'll ever meet or they could be masters of bullsh*t. The mandatory deposit, plus making gazumping illegal, makes it a level (or as near as you can get to it) playing field. The current system protects no-one. It's based on flimsy trust. "Well, yeah I do want to buy your property but I might want to change my mind or not tell you when I want a survey done and no, why should I tell you if I need a mortgage."

I pay my £1000 deposit and pull out due to

a problems revealed after survey

or

b commonly asked on MSE you as seller could not be bothered to pull out your lease and give an accurate lease length or service charges due, which later reveal that the lease is only 75 years and SC is in fact not as and when but £2k a year

and you as seller wont agree to a sensible reduction in price.

Why shoud I lose my deposit?

Because the seller holds the cards, the ace in the pack, the diamond in the rough, the golden Willy Wonka ticket. The seller has what the buyer wants so it's up to the buyer to prove he/she is genuine. The only way to show this is by putting down a deposit. Yes, the buyer may be forced to pull out but that's hard luck. Mandatory deposits may not be 100 percent fair but they're sure as heck fairer than the current system! And as I say, the seller has the product so he/she is entitled to say "I accept your offer but you got to pay me a deposit." The buyer has to accept this because the buyer is wanting something - not selling something. People have to accept this. The seller does have some advantage and this is why the deposit is necessary.

fart

HAMISH_MCTAVISH wrote: »

Why not?

You'd have a far better system, that solves your problems, without needing to invent a new one from scratch.

Exactly.

Also it works like any other contract in the world:

Mortgage? Ok, you can have one, but this contract states that if you don't fulfill the contract and pay us on time we will take you to court and take the house off you.

Want to buy the house? Ok, you can, but once i accept your offer the contract is binding, and you must fulfill it and pay us for the house or we will take you to court and take our expenses + compo off you.

Same protection as anything else which has a contract but doesn't require a deposit - the contract negates the need for a deposit because it offers the same protection, something some people can't fathom.

Propertyfan

The terms of the deposit can be negotiable when the new conveyancing law is worded. It has to be a law - not some agreement made by a group of dodgy estate agents and solicitors. It's a proper law.

The law could include conditions in which a deposit must be returned. For example:

If the seller can prove beyond reasonable doubt a survey shows the property is uninhabitable.

If both parties dispute this claim there could be some tribunal set up to mediate such 'disputes'.

There would be very few grounds to dispute the return of the deposit. Reasons like:

"I changed my mind."

"I saw a cheaper property."

"The survey was fine but I now realize more work has to be done to the property and I don't want to spend extra cash."

"I will have my mortgage ready in three months so return the deposit until then."

"I was high on drugs when I said yes to the offer."

"My bank burnt down along with all my accounts."

Reasons like that will not be grounds to return a deposit.

I would say

1) If the survey/searches reveal the property is uninhabitable or vastly overpriced based on its condition,

2) Loss of a family member/or serious injury to a family member during the conveyancing process,

are the only reasons why the deposit should be returned. Any other reason is not acceptable.

beecher2

Propertyfan wrote: »

Mandatory deposits would mean I, and all the other potential sellers out there in the UK and Wales, have some safe-guard..

LOL at 'the UK and Wales' - you really need some geography lessons!

fart

beecher2 wrote: »

LOL at 'the UK and Wales' - you really need some geography lessons!

I think he needs a lot more than that.

Battleaxe44

I have never bought property without having to put down a non-refundable deposit until I came to England.

Generally you have your mortage lined up, a bridging loan in place and of course your deposit required to slap down on the house you are intending to purchase. you don't put the full deposit down until the survery has been done, you do put $1000.00 down to demonstrate good faith.

If the survey shows MAJOR problenms then you do get all of the initial depost back, but if shows cosmetic stuff and you decide back out, you definitiely don't get any of the part deposit back, once you have the report, and you are satisfied, the defects in the report cannot be rectified with a tweak, you then place the rest within 14 days. But you have to have that survey done in the week you decide you sign the documentation of Intention to Buy.

Everyone was surprised that we had everything in place before we said we would buy this place. I did have to get the bank to extract the digit for their valuation, but I was taking no prisoners. I think we spent £2500.00 in the first week to get the sale moving, best bit was the bank then gave us cash back on completion. So I slapped that back on the mortgage repayment, which the bank tried to refuse as it would screw up the monthly interest rate.

When I told the EA I wanted a 10% non refundable depostit placed down, when I was considering selling this house, he blanched, and told me it is not done over here. I asked , why not? It proves you have genuine buyer, and no-one gets stuffed around and the sale is completed quickly.

He was surprised that I had 2 x 4in D ring binders with all the documentatin regarding the house, all the survey reports we had done and the Land Registry documentation and this was before the Government had decided every one has to have a HIP done if they were selling .

I had put all the information regarding what is in the locality, the bus time tables, schools and other things for the buyer to see.

Something has to be done to improve property conveyancing over here, From what I have experienced it seems the solicitors are just not prepared to speed the process. When we sold the Hobbits House we did it my way , he had a cash buyer who had no problems and was only too happy to put down $1000.00 deposit with Hobbits soliciore, we just haad to keep her focused and the EA was really surprised at smoothly the house sale went. Six weeks from start to finish. This is how I know about Chancery Insurance...we wont go there on this thread.

Angie_B

Propertyfan wrote: »

Because the seller holds the cards, the ace in the pack, the diamond in the rough, the golden Willy Wonka ticket. The seller has what the buyer wants so it's up to the buyer to prove he/she is genuine. The only way to show this is by putting down a deposit. Yes, the buyer may be forced to pull out but that's hard luck. Mandatory deposits may not be 100 percent fair but they're sure as heck fairer than the current system! And as I say, the seller has the product so he/she is entitled to say "I accept your offer but you got to pay me a deposit." The buyer has to accept this because the buyer is wanting something - not selling something. People have to accept this. The seller does have some advantage and this is why the deposit is necessary.

What about protection for the buyer?

What about, as previously mentioned, the seller misrepresents the length of the lease meaning that the property is not worth as much as the buyer is originally lead to believe?

What about hidden issues not apparent to a layman buyer which are only revealed during the searches and survey?

How about when the seller fails to get their tenants out, as happened to me, and the sale takes 11 months because they mess up the S21, have to go to court twice and basically market the property when they are not actually in a position to sell? You want to hold the buyer financially liable for these issues, all of which, as far as I can see are the seller's fault.

Yes, buyers can mess you around but so can sellers. Any system which is so grossly favouring one party is not going to work. I agree with everyone else who has already posted here that the Scottish system should be adopted in E&W.

fart

Battleaxe44 wrote: »

I have never bought property without having to put down a non-refundable deposit until I came to England.

Generally you have your mortage lined up, a bridging loan in place and of course your deposit required to slap down on the house you are intending to purchase. you don't put the full deposit down until the survery has been done, you do put $1000.00 down to demonstrate good faith.

If the survey shows MAJOR problenms then you do get all of the initial depost back, but if shows cosmetic stuff and you decide back out, you definitiely don't get any of the part deposit back, once you have the report, and you are satisfied, the defects in the report cannot be rectified with a tweak, you then place the rest within 14 days. But you have to have that survey done in the week you decide you sign the documentation of Intention to Buy.

Everyone was surprised that we had everything in place before we said we would buy this place. I did have to get the bank to extract the digit for their valuation, but I was taking no prisoners. I think we spent £2500.00 in the first week to get the sale moving, best bit was the bank then gave us cash back on completion. So I slapped that back on the mortgage repayment, which the bank tried to refuse as it would screw up the monthly interest rate.

When I told the EA I wanted a 10% non refundable depostit placed down, when I was considering selling this house, he blanched, and told me it is not done over here. I asked , why not? It proves you have genuine buyer, and no-one gets stuffed around and the sale is completed quickly.

He was surprised that I had 2 x 4in D ring binders with all the documentatin regarding the house, all the survey reports we had done and the Land Registry documentation and this was before the Government had decided every one has to have a HIP done if they were selling .

I had put all the information regarding what is in the locality, the bus time tables, schools and other things for the buyer to see.

Something has to be done to improve property conveyancing over here, From what I have experienced it seems the solicitors are just not prepared to speed the process. When we sold the Hobbits House we did it my way , he had a cash buyer who had no problems and was only too happy to put down $1000.00 deposit with Hobbits soliciore, we just haad to keep her focused and the EA was really surprised at smoothly the house sale went. Six weeks from start to finish. This is how I know about Chancery Insurance...we wont go there on this thread.

What's your point? Nobody ever argued that a deposit is a worse way than the current system, just that that itself was inferior to other ways which are already proven to be working elsewhere.