Houses regularly coming back onto market

freddyq

Hi,

After months of observing (and being actively involved in) the property market I feel compelled to come on here and seek advice and understand other people's thoughts on the scenario of properties coming back onto the market after they have had an offer accepted and been taken off the market by the agent.

We've been searching for a new house for around 7 months now in a specific area we have identified as one which satisfies all our requirements. Clearly, properties in good areas will always be rare and have competition and that is something we expected but what I have been astonished by is the regularity with which we have seen properties 'sold' only to find they are back on the market 2-3 months later. More often than not when I have queried the reason with the agent it is because the prospective buyer simply didn't have the money they offered! In three such cases, we put forward offers and so were serious about buying the property but eventually lost out to people who crazily were offering ABOVE asking price! Having done my research I knew the property was not worth as much but I suppose when you can throw around offers without actually having the money it's not a surprise. What angers and frustrates me most is the 'missed opportunity' for serious buyers like us. By the time the property returns to the market we are either looking at something else or weary/in danger of experiencing the exact same situation again.

It's well documented that this is an unregulated industry in which agents can manipulate buyers and sellers as they wish but I find it crazy that genuine and serious buyers with money have to be on the same playing field as those who do not. It is a waste of time for both sides.

Who is at fault here? Are agents not properly qualifying buyers? Or are lenders just dragging their heels and delaying mortgage decisions until late stages? I've heard so many horror stories and complaints about this industry - why isn't there a concerted effort to get the government to regulate this industry and bring it out of the stone ages? So many other countries have been doing it for years...:mad::mad::undecided:angry::huh::shocked::wall:

-taff

Noticed the same thing here.
Several houses I was interested in came on, were sold stc, then back on again in a month.
Some of them were due to buyers not having great credit to get the mortgage, some were down to problems with the house that showed up in surveys, some were down to sellers wanting someone who could go quicker than their original accepted buyer.

Surrey_EA

From an estate agents perspective, it is very difficult to fully and accurately qualify the financial position of a particular buyer, an EA can only work from the information they are given.

I'm not sure AIPs from lenders are worth a great deal, as they are only based on information a particular person has given to a prospective lender, and this information will not have been credit checked or verified in any way.

I'm sure many EAs will agree with you that there needs to be a better system in place, as we benefit as much as anyone from a swift, straightforward transaction.

Whilst it is impossible to disagree that there are unscrupulous agents out there, many are not, and is it really the agents fault if a buyer misrepresents their personal financial position?

freddyq

I suppose the crux of the issue is that it feels like the fundamental steps in the process are happening in the wrong order. What's the point of having a serious bidding war for a property, taking offers and accepting one only to realise you have to go back to square 1 because the buyer had not been properly verified or the house has something wrong with it, or both!

freddyq

Surrey_EA wrote: »

Whilst it is impossible to disagree that there are unscrupulous agents out there, many are not, and is it really the agents fault if a buyer misrepresents their personal financial position?

No it's not, unless of course it becomes the agent's responsibility to formally assess a buyer's financial position so that a lie can't simply get them through. And also, for those agents who are manipulative, regulation would at least deal with them. Though not all agents are untrustworthy the reality is that areas where demand (and therefore price) is highest is where you are more likely to encounter the 'wrong' type and that arguably has a greater impact than say an agent in a slower or less thriving location.

Not sure if anyone caught the recent documentary on C4 about agents in Central London willing to do shady deals with buyers clearly funding the purchase with black money...and these are agents who have billboards advertising themselves as ethical! Doesn't exactly help the perception.

GoldenShadow

House we are buying was sold then reappeared. Buyers had a 50% chance of getting a mortgage so the vendors said no thanks when they found out and asked for it to go back on the market.

We had an AIP in place and the EA gave me a right grilling and wouldn't put my offer forward until I spoke to their financial advisor. As it turned out, they used someone who was independent and I only sent him our AIP with agreement that he gave the EA a yes or a no and didn't disclose what the figure on the AIP was. I felt like I was going against all my better judgement and all the advice on here, but luckily they didn't push us to up our offer and it was accepted. The vendor said further down the line that they instructed the EA to grill them, because they were absolutely fuming about the first buyer still.

Our AIP said we could borrow up to 35% more than we wanted to, and I didn't want them to think we were prepared to borrow anywhere near that because we aren't.

freddyq

@GoldenShadow - I've also been through that same dilemma with the AIP and not wanting to share it with the vendor's EA. Ironically, the house we are now attempting/hoping to buy went on and off the market 3 times before went in for it. I actually feel sorry for the vendor.

Surrey_EA

I suppose we're really discussing two separate, although intrinsically linked, issues here. Some form of effective regulation for estate agents, and how to accurately verify the financial position of prospective buyers.

On the first issue, there is plenty of legislation that covers the work of estate agency, in my view the problem is that its inadequately applied.

It is difficult to satisfactorily resolve the problem of how to assess a buyer's financial position. One way would be to make buyers go through the full mortgage application process prior to identifying a home to buy. The difficulty here is that lenders place time limits on their mortgage offers, and it is already an issue to conclude a transaction before an offer expires, so this part would need to be looked in to.

I do sympathise with your frustrations, but in order to solve the issues a wholesale redesign of the whole system is required, and that I'm afraid is unlikely to happen.

Surrey_EA

GoldenShadow wrote: »

AIP

freddyq wrote: »

AIP

I really do not place any value on the existence of an AIP, even if a prospective buyer is prepared to show it to me. Therefore, they provide no assistance to the problem the OP is concerned about.

Bluebirdman_of_Alcathays

Surrey_EA wrote: »

It is difficult to satisfactorily resolve the problem of how to assess a buyer's financial position. One way would be to make buyers go through the full mortgage application process prior to identifying a home to buy. The difficulty here is that lenders place time limits on their mortgage offers, and it is already an issue to conclude a transaction before an offer expires, so this part would need to be looked in to.

I do sympathise with your frustrations, but in order to solve the issues a wholesale redesign of the whole system is required, and that I'm afraid is unlikely to happen.

The fundamental problem as often discussed on here is the system where the agent of the vendor is "qualifying" the purchasers position. This conflict of interest is wholly unethical.

A wholesale redesign wouldn't even be that difficult. If you had a French style system, where once offer & acceptance have occured (followed by 7 day cooling off period) the purchaser is committed to a 10% deposit regardless of outcome, there would be a marked reduction in the issues the OP mentions.

freddyq

Surrey_EA wrote: »

I really do not place any value on the existence of an AIP, even if a prospective buyer is prepared to show it to me. Therefore, they provide no assistance to the problem the OP is concerned about.

You say that, but whenever I've made offers in the last 7 months the agent has asked me for this and refused to consider my offer without! But I do agree that it's clearly too lose a endorsement to help the problem.