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Upfront deposit - the only way to test a buyer's bona fides?
Comments
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I really don't mean this in a derogatory way:
I don't understand how it is that the process is so much faster and easier in America. Most people are all moved in within a month of first viewing the house they like. I have never bought a house in America, so I'm not entirely sure of what all happens. There are inspections and the money is put into a third-party account (escrow) until everything is signed on closing day.
I do know of one other difference: you don't need legal advice. The real estate agents do everything.
Also, agents can sell you any property. They sell houses and they help people buy houses. They may sell you a house they have listed, themselves, or they may sell you a house being sold by another agency. If you're looking for a home in, say, Cincinnati, you just go to an agent recommended by a friend. You tell them what you're looking for and they help you find it. Kinda like the presenters on "Location, Location, Location." They show you around properties, advise you on what you need to do, and work out all the paperwork. They split the commission with the seller's agent.:beer:0 -
Doozergirl wrote: »It certainly wouldn't be a simple legislative decision. You can't simply take a non-refundable deposit at the start because the entire conveyancing process. A non-refundable deposit is indeed placed on the property, when a buyer is sure that the purchase is sound and that is at exchange of contracts. It takes time to get there but everything that happens in the process is legitimate and any dodgy result is suitable reason for people to pull out. Placing a deposit before you even know if the property is sound, is unfair to potential purchasers.
People pull out for different reasons. One buyer may be happy to proceed on certain survey results, another buyer would run at the mention of a small bit of work that they couldn't comprehend the wording of. There are so many ambiguous points in searches etc. that you could easily find a 'legitimate' reason for pulling out.
What if a vendor was let down by their vendor and had to withdraw from their own sale? Who gets blamed then?
A decent HIP with useful information would help to speed up the process. Searches and surveys paid for by the vendor on the sale of a property does make sense in a way. Eridicates any non-genuine vendors to start with and, with co-operation from the associated agencies, makes the process faster and more transaparent for
Estate Agents properly verifyig offers would help infinately and not accepting offers without a mortgage in principle also helps.
The system in Scotland seems just as flawed.
And you must be joking if I would charge, let alone pay £5 to view a house!
Its saying too that the original concept of hips, way before the relative skeleton we see today was designed to minimise this completely.
the idea was our "FTBcouple" go into estate agent ( or online) pick out a couple of flats theyd like to view. They take the particulars, and can read the hip before they actually bother to go and view.
They have read the hip for flat 1 and they notice it has
full statement of contents
floor plans
boundariy info
all local searches ( rail, water, mining etc)
A full structural survey
photographs
gas/elec cert
lease information including Service charges, company accounts that sort of thing)
EPC
planning & LA
AND THE CONTRACT FOR BUYING THE FLAT ITSELF.
and so on.
therefore couple are able to see BEFORE even viewing that theres subsidence issues, or neighbour issues, and where boundaries lay! All the sort of things that can collapse chains later down the line, or have to have that deductions on the offer in light of the survey.
When they went to view Flat 1, they were satisfied with the info about the house. they had noted the work, and it seemed a level they were happy with. When they went -they liked the flat, and they put an offer in and it was accepted.
At this the Hips sol sends the hip to the buyers sol and then the sol reads them through it. buyers sol goes through the contract, aand when they are both satisfied that the contract is ok, then its time to exchange.
It could have been tremendously quick, for example there was an idea that these contracts COULD in theory be signed in an estate agents office. ( this i have reservations about for obvious reasons!)
This to me is the utopia.
It would require
*lenders to accept the searches surveys and so on from the HIP
*surveyors to become property valuers, not estate agents ( as they would have the specialist knowledge of the property structure etc so and in tandem they know a planning rule will devalue that house etc WAY BEFORE MARKETING . (then comes the fact that surveyors have to be independent for the lender... so theres that issue too) theproblem is , how do you have a "market value" the EAs currently feel out local markets. Minefield.
the only potential way I can see is that EAs would value and the sureyor would go round at the same time ( surveyor is independent) the EA has his val then the survey is presented, then the EA values in response to that. Difficult one i think.
*a change in culture of estate agency. from trying to blag a house off the market, the facts speak for themselves.Do you want to buy this place even with these problems? If so YES, proceed. IF NO, the vendor then has to sit on the market to then think, you know what stuff it ill take that chimney stack down and replace those back windows that make my house look crap in the hip.
*there would be no more of that "that place has been on the market for ages,bet theres something wrong with it" Now you can see UPFRONT whats wrong with a property. Vendors wont like that.
*there would be fewer of those "people coming round for a nose"
*there would be zero reasons other than finanicial/personal- eg divorces type things why a buyer or seller would pull out . the market would restrict a little, as I think only those who are COMMITTED to moving put thier places up for sale.
*a change in culture to vendors, who will have thier home professionally valued on the basis of "quality" of the home - bodge jobs would be minimised in an ideal world.
*a change in buyers who will be process become more aware of structure/maintainence etc of properties and be more conversant with whats in hips. Plus the process is simplified hugely.
In this utopia properties can be literally exchanged on the same day. Couple see flat 1 in the morning, pop along to a local solicitor in the afternoon, sol calls the vendor - when shall we set a date for completion? ( there does need to be a cooling off period which was another fly in the oitment for this plan)
BUt of course the lenders wont accept it. Probably cos there are too many changes needed and rightly or wrongly the NAEA have always had a great power with the governments and of course the lenders have huge influence.
Shame really, cos done right it would be great I think. Done wrong UK-style wouldnt be worth doing, so they are doing it peicemeal know working toward that end eventually.:beer: Well aint funny how its the little things in life that mean the most? Not where you live, the car you drive or the price tag on your clothes.
Theres no dollar sign on piece of mind
This Ive come to know...
So if you agree have a drink with me, raise your glasses for a toast :beer:0 -
How's this for an idea.
Once an offer is accepted both buyer and seller deposit £1000 to be held by a third party.
If either pull out for any reason, other than a substantive reason coming out of serches, survey or other enquiries then the £2000 gets returned to the other party.
Hence if a seller decided to go for a higher offer then he loses his £1k to the buyer and if the buyer decides he doesn't like the house after all, because its' on a busy road or the view of the gasworks isn't his cup of tea after all, then he sacrefices his £1k to the seller.
The only grey area for this idea is that the buyer could use the survey to legitimately pull out of a house purchase. However you may therefore need quick arbitration to consider whether or not this is a valid reason to pull out..
Even the Scottish system is not perfect. My inlaws had a sale fall through on their house because the buyers' buyers pulled out on a technicality.
Their buyers' problem was this. Apparently a window was not up to building regs and they offered a price reduction to put it right but their buyers pulled out anyway.
Result was that the in laws lost their buyer and went to see their solicitor about recovering costs and was told that it wouldn't be worth pursuing, as without a buyer for their house they may not have the funds, besides they could see that the people down the line had played the system to their unfair advantage and felt that they didn't need to kick the middle people again.Behind every great man is a good womanBeside this ordinary man is a great woman£2 savings jar - now at £3.42:rotfl:0 -
BrandNewDay wrote: »I really don't mean this in a derogatory way:
I don't understand how it is that the process is so much faster and easier in America. Most people are all moved in within a month of first viewing the house they like. I have never bought a house in America, so I'm not entirely sure of what all happens. There are inspections and the money is put into a third-party account (escrow) until everything is signed on closing day.
I do know of one other difference: you don't need legal advice. The real estate agents do everything.
Also, agents can sell you any property. They sell houses and they help people buy houses. They may sell you a house they have listed, themselves, or they may sell you a house being sold by another agency. If you're looking for a home in, say, Cincinnati, you just go to an agent recommended by a friend. You tell them what you're looking for and they help you find it. Kinda like the presenters on "Location, Location, Location." They show you around properties, advise you on what you need to do, and work out all the paperwork. They split the commission with the seller's agent.
Good morning: The house buying/selling process is straight forward in Canada as well... http://www.cmhc-schl.gc.ca/en/co/buho/hostst/hostst_007.cfm
The thumb needs pulling out over here;)
HTH
CanuckleheadAsk to see CIPHE (Chartered Institute of Plumbing & Heating Engineering)0 -
How's this for an idea.
Once an offer is accepted both buyer and seller deposit £1000 to be held by a third party.
If either pull out for any reason, other than a substantive reason coming out of serches, survey or other enquiries then the £2000 gets returned to the other party.
Hence if a seller decided to go for a higher offer then he loses his £1k to the buyer and if the buyer decides he doesn't like the house after all, because its' on a busy road or the view of the gasworks isn't his cup of tea after all, then he sacrefices his £1k to the seller.
The only grey area for this idea is that the buyer could use the survey to legitimately pull out of a house purchase. However you may therefore need quick arbitration to consider whether or not this is a valid reason to pull out..
Even the Scottish system is not perfect. My inlaws had a sale fall through on their house because the buyers' buyers pulled out on a technicality.
Their buyers' problem was this. Apparently a window was not up to building regs and they offered a price reduction to put it right but their buyers pulled out anyway.
Result was that the in laws lost their buyer and went to see their solicitor about recovering costs and was told that it wouldn't be worth pursuing, as without a buyer for their house they may not have the funds, besides they could see that the people down the line had played the system to their unfair advantage and felt that they didn't need to kick the middle people again.
Excellent idea. Inept government after inept government has kept us waiting on this one. The only people who benefit from the lack of this 'honesty payment' are the rogues themselves and, as usual, the lawyers. Since the governments are often composed of little other than lawyers, care to guess why we haven't seen it..?0 -
I´d be happy with paying a nominal amount to view a potential future home. Sadly, there are people who view homes for a hobby.
I´ve viewed about 9 houses and bought 4 of them. I also bought a BTL without a viewing.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
Gorgeous_George wrote: »Sadly, there are people who view homes for a hobby.GG
A lot of PPs have talked about this and I'm sure they exist but personally, in the months that our previosu house was on the market, I certainly wasn't aware of any of these hobbiest viwers. Maybe that was because we were in rural Suffolk. Anyone care to give an estimate as to the percentage of hobbiest viewers they have encountered?Unless more than 50% of your viewers are hobbiest viewers I would think that charging would be counter-productive for the mach larger percentage of people who are serious buyers.
We've looked at at least 50 houses in the last year and haven't yet bought anything... that does NOT make us hobbiest, just haven't found the right place at the right price for us yet.“A journey is best measured in friends, not in miles.”
(Tim Cahill)0 -
If either pull out for any reason, other than a substantive reason coming out of serches, survey or other enquiries then the £2000 gets returned to the other party.
Just curious really. In essence I'd be in support of anything which could make the house buying/selling process fairer, but I would not be in favour of legislation which disadvantages either the buyer or the seller (and the title of this thread implied that the OP wanted to give the seller an advantage over the buyer - only later did he/she suggest that both parties should have to put down a deposit).
However, to me, all that seems to be suggested so far is to move all the time-wasting and uncertainty a step further forward, because currently we have the date of exchange as a date beyond which people would not pull out, whereas now we have the date of - well, making an offer, I guess.
Anyway, I'm just rambling now.0 -
If I pay to view a house, it had better be Blenheim Palace or something like that.
I do wonder if the truly great estates you see listed for £15,000,000 have any sort of screening? I mean, I like to look at them on Right Move and pretend I've just won the lottery.... but, if I really DID win the lottery, and wanted to view a Georgian country manor, I don't know if the EA would even take me seriously. "No! Really! We just won the lottery and we can't WAIT to be vulgar!":beer:0 -
PasturesNew wrote: »There is a non-refundable deposit. At exchange.
Until exchange neither side knows the the other is in a position to buy it. It works both ways.
Seller: might not be his house to sell for many reasons
Buyer: might not be able to get a mortgage on the property for 101 reasons
Yes it's a pain, but all the time and faffing about is to ensure that the seller has a house to sell and the buyer can buy it. Then at exchange the real deal is done and a deposit is put down.
If I were asked to pay to view, I'd tell you to s0d off.
If you wanted a deposit once I made my initial offer I'd view you great suspicion and not proceed.[/quote]
And it is precisely the 'sod off', careless tendency who are the greatest whingers when the market changes, the boot is on the other foot and they get gazumped after large layouts on surveys etc. This is exactly why we need a change in the law.
One thing that hasn't been considered by all the scoffers is that asking for a deposit may be considered a sign that a seller is in deadly earnest about selling - and particularly if they too are willing to match it with a similar amount to be held in common by an agreed 3rd party.
Not to be willing to engage in such an open, reasonable arrangement, in my opinion, is a sign of one thing and one thing only.
Come on HMG, let's have this put in place and soon.0
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