English / Welsh house purchase system sucks.

TELLIT01

My niece recently put her house on the market and had lots of interest.  Within a week she had an offer in excess of the asking price, on condition that she take it off the market.  Everything seemed to be going well until, literally a couple of days before exchange was due to happen, the purchaser informed them they were only willing to pay £10k less than the asking price.  The suspicion is that this was always their intention, assuming the vendor would panic and agree rather than have a chain collapse.  Fortunately for my niece there is no chain and she was able to tell the purchaser where to go.  She is however stuck with a bill for several hundred pounds from her solicitor through no fault of her own.

The Scottish system, where an accepted offer is basically a binding agreement, seems a much better system.  I do realise that offers in Scotland can be conditional, but in this case the purchaser was just trying to ..... the vendor.

tempus_fugit

That can still happen in Scotland as well, although not usually as late in the procedure as that. Although an offer is binding (it is in England too), people often renege on it and it only becomes truly binding, as in there are penalties for withdrawal from the contract, once missives have been completed and the “bargain concluded” (equivalent to “Completion” in England). If that takes a while (and it sometimes can for various reasons) you are open to the same sort of shenanigans as under the English system, albeit it does happen more regularly down south. The Scottish system is just built to be faster, there’s essentially little difference between the systems other than that.

JJG

tempus_fugit said:

That can still happen in Scotland as well, although not usually as late in the procedure as that. Although an offer is binding (it is in England too), people often renege on it and it only becomes truly binding, as in there are penalties for withdrawal from the contract, once missives have been completed and the “bargain concluded” (equivalent to “Completion” in England). If that takes a while (and it sometimes can for various reasons) you are open to the same sort of shenanigans as under the English system, albeit it does happen more regularly down south. The Scottish system is just built to be faster, there’s essentially little difference between the systems other than that.

Very true. However I believe conclusion of missives is the equivalent to “exchange” in England. Not “completion”.

MovingForwards

JJG said:

tempus_fugit said:

That can still happen in Scotland as well, although not usually as late in the procedure as that. Although an offer is binding (it is in England too), people often renege on it and it only becomes truly binding, as in there are penalties for withdrawal from the contract, once missives have been completed and the “bargain concluded” (equivalent to “Completion” in England). If that takes a while (and it sometimes can for various reasons) you are open to the same sort of shenanigans as under the English system, albeit it does happen more regularly down south. The Scottish system is just built to be faster, there’s essentially little difference between the systems other than that.

Very true. However I believe conclusion of missives is the equivalent to “exchange” in England. Not “completion”.

It is the equivalent of exchange, settlement (date of entry) is the equivalent of completion. 

p00hsticks

TELLIT01 said:

 She is however stuck with a bill for several hundred pounds from her solicitor through no fault of her own.

The Scottish system, where an accepted offer is basically a binding agreement, seems a much better system.

Don;t forget that, as I understand it, in Scotland your niece would have had to fork our to get a survey done up front before she could even put the house on the market.

TELLIT01

p00hsticks said:

TELLIT01 said:

 She is however stuck with a bill for several hundred pounds from her solicitor through no fault of her own.

The Scottish system, where an accepted offer is basically a binding agreement, seems a much better system.

Don;t forget that, as I understand it, in Scotland your niece would have had to fork our to get a survey done up front before she could even put the house on the market.

Which isn't a bad idea to my way of thinking.  Then everybody knows the state of the property before they make an offer on it. Thankfully she has received another offer within a couple of days of the others pulling out. 

Belenus

TELLIT01 said:

My niece recently put her house on the market and had lots of interest.  Within a week she had an offer in excess of the asking price, on condition that she take it off the market.  Everything seemed to be going well until, literally a couple of days before exchange was due to happen, the purchaser informed them they were only willing to pay £10k less than the asking price.  The suspicion is that this was always their intention, assuming the vendor would panic and agree rather than have a chain collapse.  Fortunately for my niece there is no chain and she was able to tell the purchaser where to go.  She is however stuck with a bill for several hundred pounds from her solicitor through no fault of her own.

The Scottish system, where an accepted offer is basically a binding agreement, seems a much better system.  I do realise that offers in Scotland can be conditional, but in this case the purchaser was just trying to ..... the vendor.

If property prices are rising in her area she may well get that few hundred pounds back and more if the house sells for a higher price than the gazunderer offered.

Is she in a hurry to sell?