Contract & Survey Races

Habib2342

Hi,

After reading what a contract race actually entails, I have pulled out of a purchase. What a contract race effectively means is two parties bid the same price for the same property and who ever gets their surveying and conveyancing done quicker will get this property.

I think this is outrageous for estate agents to play this game as one party can spend money on a survey and instruct a solicitor to begin the legal work on a property and then still lose out on it because the other party has acted quicker. Not only will you lose the property you will be liable to the solicitor for work already done and of course the cost of a survey.

Now a survey race, as far as my understanding goes, is the property will go to whovever gets their survey booked or survey done ? They do know getting a survey done is by no means a sure thing the buyer will go ahead with the property if it reveals anything adverse about it.

I get that estate agents have targets to meet and commission to earn but playing off interested property buyers against each other seems out of sync of what is for most people, the most important purchase of their lives.

eddddy

Habib2342 wrote: »

I get that estate agents have targets to meet and commission to earn but playing off interested property buyers against each other seems out of sync of what is for most people, the most important purchase of their lives.

It would be the seller that decides to have a contract race, not the EA. Although I guess an EA might suggest the idea to a seller.

But I think contract races are rare these days. If there are two buyers wanting the same property, it's usually settled by a mini bidding war. Whoever bids highest wins.

AnotherJoe

You are looking at this in isolation without knowing the background. As long as all parties know upfront then it's perfectly reasonable. If you don't know then yes it's bad.

It's very unlikely to be the EA that's instigating this, almost certainly the vendor.the EA may not even know about it.

There's a seller posting here at the moment his cash buyer seems to be doing nothing, I've suggested he puts it back on for sale and tells any interested parties if they can get to exchange Before the current supposed vendor then they would be happy with that. Someone may think it's a gamble worth taking, after all they could spend that money and it fall through for other reasons anyway.

AdrianC

Habib2342 wrote: »

I think this is outrageous for estate agents to play this game

It's not the EA. It's the vendor. They're the ones who decide who gets to buy their house.

I get that estate agents have targets to meet and commission to earn but playing off interested property buyers against each other seems out of sync of what is for most people, the most important purchase of their lives.

The vendor is the one selling their single most expensive and important possession. Is it wrong for them to want to sell it for as much as possible, to whoever is going to muck them about least?

Habib2342

some more info for you..

the whole reason why they entered into a contract race was because they( the estate agent ) believed Natwest wouldn't grant us a mortgage. I was telling the agent that they would in fact lend, but she was having none of it. I even got my contact at Natwest to contact her to let her know.

Now i have no idea whether it was in fact the developer or the estate agent that instigated this contract race but she the agent seemed to be in a hurry 'to get off site' to quote her own words.

the agent didn't seem to know whether to say if a mortgage offer or a survey being booked was enough to take it off the market. In the end, I got tired of being played around and was getting everything ready to buy the property ( surveys, conveyancing etc ) and having found out what a contract race entailed, I pulled out as the prospect of spending 4k on survey and solicitor fees and still potentially lose out on the property too much to stomach.

Then the day after I informed the agent we were pulling out , she phones me to ask how did my meeting with natwest go and I said 'well look we pulled out because you or the developer placed us in a contract race, so no mortgage was submitted or approved'.

As other posts alluded to, the estate agency profession needs some form of regulation/overhaul where the best interest of all parties concerned are upheld throughout the sales process and buyers are not played against each other for the sake of realising commission quicker.


Ok maybe i am still looking at this in isolation but it feels to me,as a buyer we were being played by the agent or developer, which i think is out of order..

kinger101

Contract races are extremely rare as they're a very cràppy way of treating vendors, and unlikely to secure the highest price in any event. Most sellers by definition have also been buyers, so they appreciate what's fair.

AdrianC

Habib2342 wrote: »

the whole reason why they entered into a contract race was because they( the estate agent ) believed Natwest wouldn't grant us a mortgage.

Riiight.

I even got my contact at Natwest to contact her to let her know.

Was this some random mate who happens to work there, or was there a formal DiP or anything similar available?

Now i have no idea whether it was in fact the developer or the estate agent that instigated this contract race

Ah, it's a developer?

So, basically, you're buying off a developer, and the EA didn't think you would be able to borrow sufficient?

The drip-drip feed of pertinent information.

AnotherJoe

Habib2342 wrote: »

some more info for you..

the whole reason why they entered into a contract race was because they( the estate agent ) believed Natwest wouldn't grant us a mortgage. I was telling the agent that they would in fact lend, but she was having none of it. I even got my contact at Natwest to contact her to let her know.

Now i have no idea whether it was in fact the developer or the estate agent that instigated this contract race but she the agent seemed to be in a hurry 'to get off site' to quote her own words.

An EA cant instigate a contract race. Its possible they might suggest it but unlikely, that will be a lot of hassle dealing with two buyers, double the work for the one commission. Why would they want that? Its the vendor, which in this case is a developer, where cash is king and cash flow doubly so they need that money to pay off expensive loans, or get started on the next development .

the agent didn't seem to know whether to say if a mortgage offer or a survey being booked was enough to take it off the market. In the end, I got tired of being played around and was getting everything ready to buy the property ( surveys, conveyancing etc ) and having found out what a contract race entailed, I pulled out as the prospect of spending 4k on survey and solicitor fees and still potentially lose out on the property too much to stomach.

I think the same happened with them, you took too long to come up with documented evidence you could get a loan and they were tired of being played round by you. You were, in your own words "getting ready" which means you were not ready.

Then the day after I informed the agent we were pulling out , she phones me to ask how did my meeting with natwest go and I said 'well look we pulled out because you or the developer placed us in a contract race, so no mortgage was submitted or approved'.

As other posts alluded to, the estate agency profession needs some form of regulation/overhaul where the best interest of all parties concerned are upheld throughout the sales process and buyers are not played against each other for the sake of realising commission quicker.

Nope, for the sake of getting the deal from a buyer that was proceedable. They didnt believe you. How long has this process been going on? And again, not the EA, the developer is the one that decides. An EA can't put anyone in a contract race.


Ok maybe i am still looking at this in isolation but it feels to me,as a buyer we were being played by the agent or developer, which i think is out of order..

And they thought you were playing them. Next time you'll need to be more prepared and faster.

Hoploz

Was there actually another buyer lined up? All the OP has said is that they were questioning his/her proceedability, and pulled out due to all the questioning.

I don't see why an ordinary DIP was not offered up straightaway, followed by confirmation of the mortgage application.

kinger101

Somewhat unhelpfully, this is a continuation of another thread which implies it was indeed a contract race;

https://forums.moneysavingexpert.com/discussion/comment/70793144#Comment_70793144

eddddy

Habib

Having read a few of your posts, I think you need to take a step back. The challenges you have are:

1. Natwest appear to have agreed to a very unusual mortgage arrangement (So unusual that EAs don't believe it.)

2. You don't fully understand the property buying process - so you get confused, and then you confuse EAs.

The result is that EAs lose confidence in you.


So I would suggest you do the following (in this order) :

1. Get an 'Agreement in Principle' letter from Natwest

2. Find a conveyancing solicitor who is also happy to deal with the legal charge you require

3. Find a property, make an offer - show the EA 1 and 2 above.

(If the EA suggests using their solicitor - just say that you cannot because of some legal complexities. Don't confuse things by trying to explain things you don't fully understand.)