A Conveyancers view of Deal or no deal
An article in today’s Mail Online entitled ‘Deal or no deal? Don't let buyers stall your sale in a sticky market’ has some sage albeit unrevolutionary advice for sellers.
The article suggest that buyers are slowing, even scuppering deals with aggressive last minute negotiations.
The Conveyancing Insider looks in more detail at what you can do to prevent buyers from slowing up a conveyancing transaction.
Of course this phenomenon is nothing new.
With the wild oscillations of the property market it is possible to spin the same old hackneyed adages into contemporary relevance by linking them to the prevailing property market conditions.
As the overwhelming diversity of media channels desperately try to supply an endless stream of content it is inevitable that we should see age old wisdom and knowledge endlessly re packaged.
So what of the points raised in the Mail’s article.
It is certainly true that mortgages are more difficult to obtain and the mortgage application process is becoming more protracted.
It is also the case that property chains add complexity and uncertainty to property buyers and sellers. But is there anything new about this? Not really, the same problems exist in a buyers or sellers market and in a buoyant or stagnant market.
No matter which way you seem to cut it, a 25-30% fall through rate always seems to be the outcome. I suspect it will always be so, or at least until the legal process is overhauled so that an offer is binding, a point that the Mail is wise to make.
Solicitors, Lenders and Chartered surveyors can be slow
Some professionals have been slow to modernise, both In terms of embracing new technology (many can't give up the snail mail) and in terms of a more consumer centred approach to customer service.
Many aren’t slow of course but it would appear that we are starting to see a hunger in those ‘late bloomer’ professionals that can ultimately only benefit the consumer.
Buyers demanding money off the purchase price
The Mail makes the point that both the protracted nature of transactions and adverse survey results are leading purchasers to demand discounts from the originally agreed purchase price.
Of course this is also nothing new. Last minute negotiations or ‘Chipping’ as it is known has been around for years, though boom and bust.
To say that buyers are ‘demanding’ last minute discounts is alarmist. Whether ethical or not, some buyers renegotiate based on further information that has come to light that affects the value of the property.
Dare I mention the now forgotten initial idea that underpinned the HIP? Anyone remember them?
In the example provided by the Mail, a HIP that would have included a Property Condition Report (not to mention Lease, Searches and other information) would have seen the buyer fully appraised of the property condition and thus value before making an offer. Not only that but much of the legal documentation would have prepared in advance thus reducing the Conveyancing transaction time.
Of course I am a lone voice in all probability, but hang on.
Was it not the Mail that convinced the nation that the HIP was an other example of the Nanny State? Another example of ‘Rip Off Britain’? (Google ‘Daily Mail HIPs’ to see the stance taken by the Mail).
Was it not the Mail that convinced buyers, right up to the demise of the HIP, that they were being ripped of by as much as £1000 for a HIP? Even despite the fact that market forces had driven the average price below £200, far less that the now cost of acquiring the component parts still required in the buying and selling process. I fear I may be ranting.
Lenders are ‘turning the screws’
The Mail is correct to say that Lenders are ‘turning the screws’. Many small Conveyancing Solicitor firms are facing the prospect of being culled from lender panels. This to add to their struggles with reduced work volumes and knife edge margins. Does any of this impact speed though? Not really, the issues are simply not connected.
Do Conveyancing Solicitors emphasise their services in value terms?
A brief search on the web will show you how Conveyancing Solicitors are marketing themselves. Price. Price Price Price. Commoditised like salt and valued by few.
It is ironic that not one we found emphasises speed. Not one that we found in our search is advising clients to instruct a Conveyancing Solicitor prior to finding a buyer so as to fast track conveyancing.
(Read Phil Spencer's advice on when best to instruct conveyancing Solicitor)
But why not? After all most Solicitors work on no sale no fee basis, so it is a no sale no fee no brainer argument for vendors to do just that. I am constantly surprised that the profession does not speak with one voice on this point.
The article finishes with some good advice though suggesting a look at the process over all. We would certainly support a revision of the legal process insofar as an offer being some how binding. After all this is not how much of the rest of the world operates.
Suggesting also that sellers would do well to have all of their documents and guarantees in place as early as possible is wise indeed. Hardly a replacement for a formal requirement set out in the HIP they fought so hard to do away with, but in the circumstances sensible advice nonetheless.
It will be decades before any politician dares handle the ‘Hip Hot Potato’ again. Alas.