Deal or no deal? Don't let buyers stall your sale in a sticky market

Published 17th Aug 2011

These are tough times in which to seal a property deal. From difficulties obtaining mortgages to problems with surveys, stringent legal ‘musts’ and opportunist buyers, every step of the process is fraught with delays.

With each hold-up comes the possibility of deals - and property chains - dissolving before your eyes. Deals struck in the early summer are unravelling with alarming rapidity.

I speak from personal experience. Having chased the buyer of my family home for six weeks to get a survey and mortgage and sort out the legal niceties, I finally received a demand of 25 per cent off the purchase price for repairs to the house and outbuildings.
Tough times: From difficulties obtaining mortgages to problems with surveys, stringent legal 'musts' and opportunist buyers, every step of the process is fraught with delays

Tough times: From difficulties obtaining mortgages to problems with surveys, stringent legal 'musts' and opportunist buyers, every step of the process is fraught with delays

The discount demanded amounted to tens of thousands of pounds, and between five and ten times the estimates given by qualified professionals.

A survey by 1st Property Lawyers identified that 29 per cent of deals fell through in the first six months of this year, and the situation has not improved in recent months.

Estate agents are reluctant to go on record about how many deals have collapsed.

‘It makes us look bad, as if we are doing something wrong,’ said one agent in West London. He was one of several agents who started besieging Daily Mail writer Steve Bird, who is looking for a property in the area.

‘Knowing I have sold my flat and am in a good position to buy, they started phoning constantly,’ says Bird. ‘They keep telling me that chains have broken down and I can set a really good deal.’

John D. Wood, in Oxford, recently felt the need to send out a round robin email to clients: ‘We have found that mortgages are taking much longer to arrange and conveyancing is taking much longer, too.’

A solicitor working for a large firm — who wants to remain anonymous — confirms that the legal side of buying and selling has changed, and it is causing deals to founder.

‘Lenders, who have huge powers collectively, are turning the screws on solicitors in terms of liability. If there is any problem in the future, they will come straight back to us.

‘We have to scrutinise everything. There is no common sense approach any more.’

As the John D. Wood email says: ‘It is astonishing how a small issue, a single missing certificate, can stall everything.’

Once a problem has been identified, it is much easier for a buyer who is in a strong position to try to hold the vendor to ransom.

A spokesman for the RICS, the professional body for surveyors, confirms that ‘there are more buyers these days who will try it on’.

From exaggerating acknowledged problems to adding unreasonable sums for any future uncertainty, the sky’s the limit.

What is the answer? It is not straightforward. At the point of accepting an offer, immediately establish a reasonable time frame within which any problems can be identified.

As a seller, find out as far as possible the financial standing of a buyer; and as a buyer, have a mortgage offer in place, subject to a valuation.

In my case, the buyer arranged one mortgage and then without telling anyone decided he could get a better deal, leading to weeks of delays before a survey could be carried out and the money released.

The delays effectively saw off a number of other potential buyers and left me open to an opportunistic offer.

A proper understanding of the situation from the off, and ground rules agreed through the estate agent, might have helped.

The overall solution, of course, is a complete reform of the mad UK conveyancing process that means an accepted offer is worthless until contracts have been exchanged.

Meanwhile, sellers should have all guarantees up to date, identify and price any work that needs doing and flag them up to buyers at the start.
If you are a cash buyer, simply wait for the phone to ring.

Source: ' ThisIsMoney '

View All Latest Articles