To wish that the government should sort out/ modernise the process for buying property in England? P

[judybloomno5]

It's the first time I've bought and sold. Last time it was all relatively straight forward as I bought a new build on an estate as a first time buyer.

It just seems all back to front (and please correct me if I'm being naive here)

....but an estate agent helps you decide the price, then a seller makes an offer and it's only when you have an informal agreement (when anyone can back out or a 'gentlemans agreement) that you and each and every buyer after you spends hundreds/thousands on legal fees finding out if there's anything wrong with said property, buying flipping indemnity policies against archaic rights of way or parish church fees or building Reg breaches, searches and whether the property is worth it anyway.

Wouldn't it be more sensible for sellers to have to have got all these things before accepting offers so buyers have a clear understanding of what they are buying so time and money isn't wasted? Wouldn't this help prevent soaring house prices? The stress of moving and buying is such that people don't move but if this system worked better then they'd move more frequently and the government would benefit from stamp duty revenue?

AIBU?

They tried to introduce this a while ago didn't they? And it didn't work because if you the buyer are not the customer who commissioned and paid for all the searches and checks then you have no legal comeback if something got missed. Under the current system if you buy a house and then find that there is something wrong that is going to cost you ££££xlots which could have been forseen at the time of purchase but wasn't, you have written agreements with professionals who you paid to check out these possibilities and you can sue them if they let you down. If the buyer commissioned and paid for all these services then the seller is the customer and has no interest in ensuring they are done properly and the service providers have no obligation to or contract with the buyer.

Don't Scotland have a better process though?

Couldn't you sue the previous owners and they in turn could point liability to professionals?

Every country in the world (well maybe not every!) has a better system than England. Every time there is movement to change it there is uproar from the legal profession and people stating it couldn't possibly work. But obviously it does work elsewhere.

There's no reason we couldn't have a process that passed the rights for searches etc. from the seller who commissions them to whoever ends up being the buyer. We just don't. It hasn't been in solicitors' interests to change that and it would mean a big step change for buyers and sellers, transferring costs from buyers to sellers, which is hard to get people to do without motivation.

There's no reason we couldn't have some sort of deposit system that made pulling out after a certain point more onerous. But it would be a big change and that's hard to do.

We used our estate agents solicitors' panel for our most recent sale. It didn't change any of the legal/liability issues you highlight, but it was the smoothest, fastest and most well communicated sale or purchase we've had in England. Our previous experience of solicitors here is that they did everything in their own time and order without any concern for how that impacted everything else, and lots of the work was kind of slapdash.

We sold a house in Spain recently and it was quicker and easier than the UK.

We've got a situation that we've made an offer and risk delaying everyone because our vendor has a converted garage without building regs but there's some dispute over whether the buyers before them should have done it as they bought the house in 2010. I'm beginning to wonder if my mortgage is going to be granted and think the delay and the cost of the survey could have been avoided (and thousands others) if only sellers were responsible for sorting out some sort of certificate to say their property has passed all the necessary tests etc rather than passing the cost to someone who has a result might not end up buying it as a result. I appreciate I'm the one who wants the mortgage but other buyers who need a mortgage might end up doing the same.

I agree, no incentive for solicitors who have built a whole speciality on this antiquated process.

My mum had a situation where she sold her flat for months but in fact her buyer had placed offers on several properties and was waiting to see which went through first, not wanting to put his eggs all in one basket. Her offer was then dropped and she was back to square one.

I feel your pain, but as a seller. My buyer, or their solicitors, are finding all sorts of weird boundary issues that have never been a problem in the 40 odd years my parents owned the house. I don't understand why they are making such an issue. But it's their loss not mine.

Scotland is different in that the process is formalised much earlier.

In Scotland, you make an offer through your solicitor, not the estate agent. It's quite common to make a conditional offer which is along the lines of "we'll pay you £200k, dependent on the survey". When you have an offer accepted, the next step is concluding the missives. That means finalising the purchase price, setting the moving/completion date and ironing out any legal issues. Once you sign the documents to conclude the missives, the purchase is binding.

What this process means is that once you get to the stage of concluding the missives you can't pull out without a hefty financial penalty. You also get a firm moving date, the vendors can't decide not to move if they haven't found anywhere and can't delay at the last minute. You don't have the situation where you think you've had an offer accepted, then get gazumped at a later date by someone offering more. It also means the vendors cant' ask for more cash at the last minute.

It does mean though that the hassle is front-loaded - the hard bit is concluding the missives, not completion. Having bought in both England and Scotland the Scottish system offers more security and certainty, but isn't any cheaper.

Oh and when we were buying in Scotland and selling in England at the same time we had to coordinate two sets of solicitors who wouldn't/couldn't talk directly to each other and didn't really understand each other's system. Now THAT was fun.

I remember also that with another house we offered on in Scotland but were not successful with the vendors had had a full structural survey done and anyone making an offer could "buy into" the survey to share the cost. I think there were 8 of us making offers, so we split the cost of the survey 8 ways. In that situation though the vendors wanted to conclude missives within 10 days, so needed things to move quickly.

The point about the buyer having no come back against the surveyor etc if the seller commissions the work can be sorted though. I work in professional services (Big 4 firm) and I regularly do due diligence assignments for the seller to show to potential buyers. The buyer uses that to instruct their professional advisers and decide whether they need to do any top up work, the idea being that both parties get a better idea re price earlier on and it speeds up the process. My work often then gets signed over to the buyer on completion so that I'm "on risk" to them. It can be done.

The main problem in England is that people on either side can back out or attempt to gazump/gazunder with no repercussions until very late in the process after both parties have invested significant time and money.

When we bought and sold last time, the first buyer pulled out days before exchange and we also lost the house we were buying because we couldn't proceed having lost our buyer.

Our second buyer couldn't get a mortgage due to some minor legal technicality to do with our property - we bought an indemnity policy but they got spooked and pulled out.

Thankfully our third buyer completed and we also bought our new property without issue, but once you have started the buying or selling process, you shouldn't be able to pull out with compensating your other party for the costs they have incurred.

In australia, you put in an offer and if it is accepted, you pay 10 pct there and then... unless like we former Brits, you add a clause to get a property inspection. This has to be done within x days (say 10) and is pretty cheap.

Deposit is paid into estate agents account who holds it in a designated trust fund, and a date for completion is set- can be anything but usually 30, 60 , 90 or less usually 120 days
Conveyancer does their bit and on the completion date money and title is exchanged.

If you have to find a property, you opt for the longer settlement date, to give you a chance to find somwhere.
Occasionally people move into rented but generally it all flows well.

Suggestion was tried in england, didnt.work. all that is left is the useless epc.

Scottish system means all queries/legals are done before offer. As pointed out, no cheaper.

The main problem in England is that people on either side can back out or attempt to gazump/gazunder with no repercussions until very late in the process after both parties have invested significant time and money.

Agreed.

Friends are in the process of buying in Holland and (from what they've said), if you make an offer and it's accepted, there are very few subsequent opportunities to withdraw. In the UK you can offer willy-nilly, stall, change your mind, try a lower offer, have the seller receive a higher offer from someone else... All entirely avoidable.

And, yes, I don't understand why all the searches etc conducted on the buyer's side can't shift to the seller. There are some searches which should be as recent/current as possible, but the likes of radon exposure and chancel repair liability aren't exactly going to appear overnight (and in any event, time can pass between the buyer doing these searches now, and completing).

They tried. It didn't work.

We had the Sellers Information Pack with searches etc in.

The problem is that mortgage lenders will only accept searches carried out in the last three months so if a house didn't immediately sell you would constantly have to redo the searches.

Ones such as mining, chancel repair etc COULD potentially be carried out and kept on file.

To be honest any solicitor worth their salt if the correct situation occurs would "buy" searches from buyers where the transaction has fallen through. I used to do this all the time - the file of the buyer would still be open because they were still looking, they didn't miss out financially. we got the searches in sooner. Brilliant

I know that the HIPS were a great idea - my BiL did a very expensive training course to be able to provide these. They were dropped for reasons stated above.

The "transfer of risk" or buying of searches seems sensible and with most properties would probably be fine.

There are advantages and disadvantages to every system though. I don't think I'd like to enter into a binding contract for thousands unless I'd had a chance to do my own research though.

And actually, I don't think it is the government who insist on this. I have just transferred a property to someone. No searches or anything - just a solicitor and the Land Reg. Easy - peasy

All the other stuff is only necessary if you, the buyer, want to be sure that you are not buying a pig-in-a-poke or if the property is being financed by Another, (mortgage co usually).

Scotland has the home report so the vast majority of buyers don't do a survey now unless there is something indicating a full structural is needed. IME searches are generally after offer but before missives, so offer is conditional on searches being clear

When I bought my house in NZ it was absolutely hassle-free.

At the time, the system was as follows:

1. The buyer makes an offer up-front, subject to conditions typically a) getting finance, b) satisfactory survey and c) satisfactory LIM (a document held by the council giving information about the land). You can add whatever condition you like. So, similar to Scotland and I don't see why the same doesn't happen in England. English law allows it. It's just not the custom, so it seems.

1. Once the seller accepts the offer, both parties are bound, therefore gazumping will get you into legal hot water (ie, you will end up being contractually bound to sell the same house to different people).

1. Land ownership is not by deed, but by entry on the land register, which takes 30 minutes to check. So no need for a lawyer to go through a chain of deeds. Transferring ownership is done online and takes a few minutes. My legal fees were the equivalent of 200 pounds.

In recent years, sellers have been getting greedy and are selling houses by auction, sealed tender etc which is a pity.

NZ's land law system is, interestingly enough, based on merchant shipping: there is a register that says who owns what, and the register is final. Australia has a similar system. By contrast, the land law system throughout the UK is absolutely archaic.

I would have Scottish law apply unless someone can come up with a better alternative. It would be better than what we have now.

I don't understand why they are making such an issue. But it's their loss not mine.

really? They are making a massive purchase and don't want to make a mistake.

Agreed the English system is bonkers - it's nothing short of miraculous when a big chain actually holds together.

We were in a chain of something like 9 buyers once, and were homeless for 3 days. It was a nightmare.
I spent those 3 days in a cheap B&B at the seaside trying not to think about how things could go wrong before we signed the contracts.

My selling and buying as similar to Toadinthehole only in the US.
I find the idea of gazumping and having to wait many months to get into your new home to be crazy. They should do away with chains, and make offers legally binding. so your completion is a month after the offer is accepted. Ours were, no one made offers unless they were serious, only way of backing out was if the structural surveys came back with major issues.
I was told there is some sort of insurance you can get to protect yourself from the other party backing out and causing you to lose money.

They should do away with chains,

How would that work? Most people need to sell before they can proceed with buying. People don't want to be in chains, they just don't have any choice, unless ftb, or buying from an owner who isn't buying another property.