Design a better house buying/selling system.

CB1979_2

very simply - IMO the biggest pitfall is the fear and uncertainty that people will pull out of the deal.

the buyers & sellers need to be held accountable, for pulling out of a sale without good reason (that's where the difficulty comes into it though!)

agree a decent HIP should be supplied, so you don't make an offer of £250k to then realise that it needs £50k of structural/electrical/plumbing work done to it, etc.

and with regard deposits:
BUYERS should put in a non-refundable deposit of eg 1% of purchase price.

SELLERS if they pull the plug will have to fully re-imburse for any costs AND match the 1% deposit supplied by the buyer.

the "costs" of the buyers will theoretically be just their own EA fees, legal fees & any deposit they have to reimburse to their buyers.
remember there will be no survey fees, etc as already done in the HIP.

jennifernil

We don't have chains up here because, as someone suggested earlier, the buying and selling are treated as totally separate, and once you have achieved either a sale or a purchase you have certainty and an agreed moving date.
If you sell first then you can risk having to rent if you don't find your next place soon enough. If you buy first then you risk needing a bridging loan. So you decide first what way you want to go and just get on with it.
In reality it is often possible to co-ordinate your dates so that you move from one house to the next on the same day.
The entry date is all part of the negotiation. If you have already sold then you can act quickly and are in a good position to have a lower offer accepted if the seller is keen to sell quickly.

kingkano

lol what you describe sounds alot like a chain I guess the only difference is once isnt dependant on the other LEGALLY but Im sure people make it so.....

Nice idea CB1979 but 1% of any house value really isnt much money... its what people lose now pulling out anyways once you consider survey and legal costs (fair enough sellers dont at the moment and they would under your system which is great). I think it needs to be 5% or 10% to really make people realise its important.

jennifernil

The entry date is all part of the offer, and once you have had an offer accepted, or accepted one yourself, the missives are normally signed within days and you are committed to proceed. This is often several months before the actual move, so generally plenty time to sell or buy as appropriate.
You cannot change your mind because for example you have not sold your own house, well, not without it costing you an awful lot of money!

The second house we bought, we had agreed the purchase in the April with a moving date in August, the sellers were buying a newbuild. In June we went on holiday for 6 weeks and while we were away my parents had concluded the sale of our house. When we got back we found our sellers had wanted to withdraw as the fellow had lost his job. Our solicitor told them this was not an option as we had sold and would have nowhere to live, so they had to find another, smaller, house to buy elsewhere. It was either that or compensate us for the additional cost of renting a property and storing our furniture.

I presume that under the English system a chain of several sales/purchases would have collapsed.

sarah_elton

In Canada you can't pull out once your offer has been accepted, i.e. they get to the level of commitment we have at exchange, when the offer's accepted (not sure if deposit changes hands at that point).

In addition, times to completion are fixed and you can choose either 30, 60 or 90 days.

courtjester

Running_Horse wrote: »

Rightmove. We did all our searching online, then contacted the agent. Rightmove has the potential to relegate agents to a very minor role (and destroy a lot of local newspaper advertising). They should consider taking property adverts direct from the seller.

Rightmove are owned by the three largest estate agents groups in the UK (Halifax, Countrywide /Bairstowes and Connells), so they are not likely to 'relegate' agents anywhere!

They also don't accept private listings as an anti-competitive measure, because their agents and shareholders don't want to compete with new methods.

Rightmove are the largest property site at present, but their dominance is set to diminish as major players come into the market (imminently) which will offer direct sales routes for homeowners, so that if you only look at Rightmove in future, you will only see a proportion of the total property available.

As it is, Rightmove are already missing a growing sector of privately advertised property which they deny access to, which is their achilles heel...

wolvoman

East to change.

Upon acceptance of offer, the buyer and seller each put 5% into escrow. The contract of the escrow states that if either party pulls out of the sale for whatever reason then the other party takes both deposits minus the escrow fee.

No gazumping.
No change of minds.
No uncertainty.

The main problem now in the process is that you effectively have 3 key stages in house sales/purchase - offer acceptance, exchange of contract and completion. And only 2 of these 3 critical stages is legally binding.

kingkano

wolvoman wrote: »

East to change.

Upon acceptance of offer, the buyer and seller each put 5% into escrow. The contract of the escrow states that if either party pulls out of the sale for whatever reason then the other party takes both deposits minus the escrow fee.

No gazumping.
No change of minds.
No uncertainty.

The main problem now in the process is that you effectively have 3 key stages in house sales/purchase - offer acceptance, exchange of contract and completion. And only 2 of these 3 critical stages is legally binding.

the only problem, as mentioned before, is sometimes there is legitimate reasons to pull out. ie a ruddy great nuclear plant being built 200yards down the road that the buyer 'forgot to mention' or other distasteful things.

I was thinking recently though, perhaps the suggestions of running it like an auction is good. Not the bidding part. But the bit where you pay 10% on your offer being accepted, and your bound to complete within 28days or you lose that 10% (plus more if it puts the other party out alot). Surveys conducted before you offer - some kind of HIP/legal pack like auctions have, so you make 'informed' offers.

Thats probably the biggest downfall in the system. You make your offer, THEN, you check to make sure there are no problems (from the myriad that CAN exist). If the checks are done before hand and you can make an informed offer, there'd be alot less broken sales I imagine?

olly300

kingkano wrote: »

Thats probably the biggest downfall in the system. You make your offer, THEN, you check to make sure there are no problems (from the myriad that CAN exist). If the checks are done before hand and you can make an informed offer, there'd be alot less broken sales I imagine?

Correct which is why HIP were thought of in the first place to stop people pulling out for stupid reasons or vendors trying to hide problems.

Maybe it's better (and easier for government) just to introduce the Scottish system in the rest of the UK, rather than be radical and try an introduce a system that only works in Denmark.

Phirefly

courtjester wrote: »

Rightmove are the largest property site at present, but their dominance is set to diminish as major players come into the market (imminently) which will offer direct sales routes for homeowners, so that if you only look at Rightmove in future, you will only see a proportion of the total property available.

As it is, Rightmove are already missing a growing sector of privately advertised property which they deny access to, which is their achilles heel...

Interesting.

Surely no matter how many private property portals there are, there's always going to be market demand for one centralised search facility. I think we're a long way off people routinely searching rightmove then doing the rounds of the private sales portals. Where do you see it heading?