Upfront Q&A Information in the Home Moving Process
Frequently Asked Questions
Providing information up front/creating a property transaction pack won’t work, unless made mandatory
It will work, and some benefits will be seen immediately, but it will take longer to work to its fullest extent. However, that will happen over time. Admittedly it would be quicker if there was legislation but we can still make a different and start that process now as has been demonstrated by those already offering the service and delivering reduced transaction times.
The buyer’s property lawyer won’t accept the searches obtained by the seller or their property lawyer
Anecdotal evidence says otherwise, many property lawyers will accept those searches. If a regulated search was originally carried out by a reputable company (for example a CoPSO member and PCCB Regulated – look out for the ‘Search Code’ logo on the search). This will ensure that the search has been carried out to specific standards and that adequate and appropriate insurance is in place to protect consumers.
So long as the search is either a regulated or official search, is in date and acceptable to the lender there is no reason why a buyer’s lawyer should not accept it – as confirmed by the CLC confirmation article in their recent newsletter.
The searches will go out of date in 3-6 months
On average, only 1 in 10 go ‘out of date’. In addition, regulated searches, can be refreshed at little or no cost. On top of that it is worth noting that even out of date searches have information which can inform a valuer and reduce assumptions which case delay through post valuation queries created by the conveyancer having to correct information in the mortgage instructions.
Collating and providing Information up front won’t speed the process up
It will and it does. There are already a number of agents and conveyancers that work together in the ‘information up front’ way. And even without the whole chain being involved they report time savings of up to four weeks. In addition, that particular transaction is less stressful for all of the parties directly involved.
The conveyancer will be distracted from more current work whilst setting up a file
Initially maybe, but as soon as this becomes the norm, carrying out this work whilst not in the heat of battle so to speak will be much easier and less stressful and could be completed by administration staff rather than qualified conveyancers/solicitors who can be freed up to concentrate on technical reviews and advice.
The workload of the property lawyer will increase as there will be a significant number of properties that come to market and never become, sold subject to contract
Workloads won’t increase, the work will simply be carried in a different way, and at a different stage. As transactions times get shorter, fall through rates will also drop. In jurisdictions already working to vendor disclosure rules the transaction times are weeks, not months, and fall through less than 2%. If sellers feel they have some skin in the game they will not be the time wasters.
Why should the agent and/or the property lawyer spend time on a matter that will cost time and money if a property never goes to sale?
Most transactions will proceed to sale, and most sellers will return to the same agent and lawyer if they have been treated fairly.
Most sales are held up by an incomplete chain, not searches or other delays
There are a number of reasons why sales are delayed. Providing information up front will deal with some of those reasons. Data indicates that of the 34% of failed transactions, a significant proportion fail because the buyer finds out after offer that they cannot use the property as they intended or that it does not meet their lender’s lending policy. By providing the information up front you secure more proceedable buyers rather than the current “potential” buyers.
Surveys and mortgage offers can also cause delays
Agreed, but see the reply above.
Technology is the answer
Like providing information up front, technology is only part of the answer. What technology can do is help to accelerate the process and aid transparency, but our profession/industry is a people one and that is unlikely to change in the near future.
We need a change in mindset – just because we have always done something one way doesn’t mean it is the only way. Buyers and Sellers follow the process laid out for them by professionals and don’t have enough experience or confidence to do things differently.
The whole conveyancing process should be overhauled
In an ideal world, maybe, but we need to do what we can now. Taking this step to ensure the provision of upfront information is taking the first step to overhauling the process.
Some agents say it is too much effort to promote packs to their sellers
All the agent needs to do is point the seller in the direction of a ‘Property Transaction Pack’ friendly lawyer or send a link or form for the seller to complete. Not only can the information they receive be used to help sell the property but also satisfy their legal requirements under the Consumer Protection from Unfair Trading Regulations by giving them the material facts about the property.
Upfront charging puts some off. How much would/should a property lawyer charge (if anything) to open a file and help compile a pack?
That will be for individual firms to decide, and ultimately market forces will dictate. Some may charge £100, some £50, some may not make a charge but just ask for the cost of disbursements. The research from the Scottish Government and feedback from Scottish agents indicates that sellers are not put off by upfront cost of the Home Report which can be as much as £750 – though the median is between £300 and £500.
The large estate agents will not want to lose the revenue they gain from their panel firms ordering searches for purchases (and having to use the estate agents chosen search provider who they have a referral agreement with)
Speeding transactions up and reducing fall through rates should counter any financial losses. Plus, they will now be ordering searches on the sale side of the transaction whereas currently searches are bought on the purchase side of the transaction.
It is a people problem not a process problem
There are many people who want to see a change and will work in a more pro-active way. Those that resist change will eventually, hopefully, see the light soon.
One property lawyer should act for the whole chain
This is not currently possible, neither lenders, regulators nor insurers would allow it.
Will management company/freeholder information (for leaseholds) go out of date?
It might, very occasionally, but that information can be refreshed, as and when necessary and is, in the main, information that the freeholder/administrator would have to provide to the seller.