One of the most frustrating and emotive things about moving house is that both buyer and seller can pull out of the deal at any time. There are normally perfectly reasonable explanations, but the retraction can cause a huge amount of distress to the other party, not to mention the incurred costs.
The legal process of selling and buying property
The legal process of transferring property from one owner to another in England is, let’s face it, protracted and fragile, and agreements are not binding until contracts are exchanged. Of course there are many and varied reasons why property transactions fail to complete, but the point is that it can take weeks, if not months, of anguish and stress before there is total commitment to the transaction. So why can’t there be certainty from, or soon after acceptance of the offer? It would make the whole house moving process so much more straightforward and would certainly help to ease our stress levels.
In Scotland the whole process is very different, where pre-offer investigations into a property are the norm, so that when the offer is accepted it is binding. This, however, means that buyers spend out a fair amount before certainty and because the bidding is normally blind they have no idea whether they will be successful or not.
Pre-contract deposits when selling property
What about a pre-contract deposit? Sadly, any Solicitor will tell you that they are not worth the salt and have to be refundable since they cannot be unconditional.
The Government did attempt to speed up the conveyancing process with the Home Information Pack, which in itself was not a bad idea, but its implementation was flawed as it emerged that buyers did not trust the vendor-commissioned surveys and their solicitors did not trust the local searches. It also reined back a free flow of stock to the market due to the up-front costs.
What is the answer, therefore? Whatever it is it won’t be simple and certainly won’t be decisive. A middle ground is to ensure that the possibility of the parties pulling out are minimised through speed of transaction. Transparency about a property is key to this. Making pre-offer information available via the Agents should be strongly encouraged, as should perhaps a scheme for buyers’ contributions to vendor-commissioned surveys, not only acting as a form of deposit, but also freeing the surveyor to act in an unbiased fashion for all parties who contribute. Maybe RICS should be considering this? The Government could also invest in more Council staff and technology to cut the waiting time for searches from several weeks to several days, rather than concentrating on purchase- assistance schemes (controversial!).
Put simply, a pre-offer preparation of the survey and draft contract, combined with speedy local search results could and should cut the whole process to 10 working days. The likelihood of either party withdrawing would then be cut dramatically and a fast exchange of contracts would provide certainty. We can dream, but surely it can’t be that hard!