UK home buying process

[ToBeClear]

We just moved back to the UK after almost 20 years in the US. The home buying process here is MAD! I can't believe how a chain can be held together by a thread of hope, and it goes on FOREVER! In the US both the buyer and seller are represented by agents who negotiate on your behalf. Both receive 3% of sale price so everyone has skin in the game to make it work. It is way more transparent and there is a sellers disclosure of what is included in the sale (window dressings, white goods etc) which can also be negotiated. Here it seems very little negotiation takes place, and they quickly go to best and final offer with little transparency. In the US the buyer also deposits 'earnest money' in an escrow account to show they are serious, which they lose if they pull out for a reason that isn't covered in the contract. Closing/exchange usually takes place within just 2 months of the final contract agreement. Here it just seems so loosey goosey and any agreement is so fragile. Buyers are at a huge disadvantage too as they have no one to represent them. I guess this is just a very frustrated post from me as the process seems so archaic!

The system you find so frustrating isn't even the whole of the UK - Scotland has an entirely different system.

I agree it's crazy but I wouldn't trust an agent to negotiate on my behalf for a property I wanted to buy if they would be getting 3% commission - naturally they would have a disincentive to argue for a lower price. And 6% of the money involved just going to agents is shocking!

It is a dreadful system, have bought and sold many times in UK and it is the most stressful experience. You feel like you cannot believe anyone and the solicitors seem to work at the slowest pace possible. In NZ you agree a price, subject to mortgage agreement and builders report or similar, sign and it can all go through in days.

I do not understand how it takes around three months from orginal sale agreement to exchange - and buyer/seller can ull out of agreement with no financial penalty.

Must be different in England. House buying process in Scotland is relatively straightforward and nobody is forking out 6% of the sale price to agents - that seems utterly ludicrous.

There are plenty of buying agents that you can employ to act on your behalf, and most will do it for less than 3%!

I've sold once and bought once in Scotland, from offer on our old flat to being in the new house was 6 weeks, no worries of purchase falling through due to the missives being binding and it was relatively straight forward, (and I was 7 months pregnant at the time).

I'm assuming you're talking about England.

You are right. the system in England and Wales is terrible. And I think it only amplifies the property booms and busts, too. People end up sitting in chains forever, telling themselves they have made a sale, and then it all falls through, before they start going through the process all over again. I think the fact that buyers are not represented professionally puts them at a huge disadvantage, so it is not surprising that so many get cold feet and purchases fall through. If a buyer is at a huge disadvantage, it only makes them more reluctant to go ahead. The system puts buyers at that disadvantage, and sellers try to capitalize on it. But putting the buyer at a disadvantage actually ends up backfiring on the seller when purchase/sale doesn't take place

I have been ranting this week about how dreadful the system is. We were meant to exchange this week. Overlooked dreadful survey and said we would absorb costs (£15k). Vendor now decided he needs 5 weeks between exchange and completion and won't pay the £400 indemnity for access rights as we are lucky to be buying the (dreadfully renovated and highest priced ever on the street) house from him. Estate agent is scared of him, everyone- including neighbours, surveyor and other agents- refers to him as "difficult". Husband is so enraged he wants to call it off.
I like the idea of vendor representation but also wonder about motivation to negotiate on price if their fee is a % of purchase price. Taking away the emotion and involving only professionals would make it a lot less stressful. But anything but current system would win my vote tbf.

Yep, house buying and selling in England is bonkers. Why can't the system be reformed? I agree with a PP that buying and selling in NZ is so straightforward and quick in comparison. I believe Scotland also has a sensible system in place.

I read a lot of threads in this section because we bought a house a few weeks ago, and we’d been viewing houses for a few weeks etc. We’re in Australia (NSW) and the system seems different to the USA and England and Wales (maybe similar to Scotland). We could negotiate the time between having our offer excepted and settlement (paying and getting keys) but the general rule of thumb is 6, 8, 10 or 12 weeks. Most vendors are encouraged to sell before buying their next property, as a buyer you’re not forced into a chain (that seems to always fail). There is a deposit that we paid that can be lost if you pull out of the sale, so you feel confident that everything will proceed.

Sorry - yes should have clarified England not the UK. I know Scotland is different. 6% is a lot but I think it is all context - our agent staged our home and marketed it. Realtors in the US are independent contractors who operate associated with one of the large brokers so I guess it operates like a franchise business. The benefit is once you make a relationship with an agent they follow you through the whole buying and selling process for years - ours was amazing and alway worked his butt off for us. It does take the emotion out of it - it's great to have someone talk you down from doing something rash or silly based on anger and frustration. They will negotiate rates too - we had such a horrific sale as we were moving her and our buyer knew it - so her agent and our agent dropped their commission rates to get the deal done. You can sell by owner of course but then you don't get the marketing or networking that a realtor has.

FabulousSophie YES! It definitely creates bubbles - buyers get so anxious about getting their dream home that they start offering over guide price etc...We were recently told a vendor would accept a certain price - we offered that understanding it would be accepted only to be told she'd used our offer to go back to a previous offer and get them to raise their offer! I WAS FURIOUS!

@Fiveshelties - exactly there is no penalty for dicking someone around!

6% is also why you see so many realtors in the top 5% earners - once you start selling million dollar homes you're quids in. It's a much more respected vocation in the US than here where EAs have a dreadful stereotype.

We've recently finished a buying and selling process. We had 2 buyers for our house pull out! 2! We were lucky that the owner of the house we bought stuck with us so we didn't lose the home we wanted.
The EA we finally sold through was great, the buyers solicitor not so. Took a lot of chasing up.
The thing that gets me, is that both times the buyer pulled out they lost nothing, but we could have lost money (and did lose time) if we'd lost the house we were buying. 1st time we were days away from exchange. All over now, and I am NEVER moving again!

TookyClothespin "NEVER moving again"? Not one to tempt fate, I see.

Tooky - my husband has said he will divorce me if I suggest moving again. We have done four moves in four years - two of them international moves! Never again.

Five We've moved a lot too, never internationally though. Gotta love the RAF! Now he's out, we can finally settle down in one place.

How do realtors deal with problems caused by chains if there are more than 2 parties involved because this is what often causes problems in England?

I think most of the problems caused in england are because people dont understand the system themselves and some try to get away with things - vendors not telling the truth and buyers pretending they are cash buyers when they are not or trying to get a bargain and drop their offer price just before exchange. If more people were honourable we wouldnt have the problems we do.

The scottish system isnt much better because you have to pay out for surveys BEFORE offering and if you then decide to pull out over a bad survey you have lost that money straight away. Im sure i read on here sometime ago of someone in Scotland who has lost out on 5 properties and therefore paid out for 5 surveys when other offers were accepted.

We've just exchanged, went sstc before officially being listed, no chain and it still took ELEVEN weeks. It's absolutely dreadful.

I would never buy again in England.

Anyone know what the system is like in N. Ireland ?

In Scotland it is the vendor who pays for a survey known as the home report so it is free from a buyers point of view. Therefore offering on houses shouldnt cost you anything here.

bilbodog there are still chains but people tend to be more flexible and exchange before they exchange on the house they are buying and rent - the US seems to have a much more fluid rental market and more apartments - or everyone just agrees to exchange the same day. I think Earnest money prevents time wasters and the closing date is always specified in the contract.

An offer is always put in a contract too, which also stipulates closing date and any other contingencies. It seems so odd here just to offer verbally and sit and wait. That way the counteroffer is also in a contract form and so the paperwork/contract is just moved backwards and forwards throughout negotiations, until everyone agrees to the price and signs, or walks away if a price can't be agreed.