It’s no secret that buying a property can be an extremely stressful experience. Moving house, organising finances and gathering all your documents aside, there can be a lot of hiccups along the way.
We’re talking about the likes of gazumping and gazundering, of course. Unfortunately, on average, prospective buyers lose around £2,899 when a house sale falls through. Of course, sometimes unexpected events occur and a sale falling through can’t be prevented. But we think gazumping and gazundering should be a thing of the past, as they just aren’t necessary. In this blog post, we’re going to compare the different processes of buying and selling property in England to other countries. We’re interested to see why gazumping and gazundering has become such a problem.
Buying and selling a house in England
Firstly, let’s take a look at what happens when you want to buy or sell property in England. It’s likely that you’ll buy and sell your home through an estate agent, usually two different ones. Your solicitor will deal with all the contracts and documents, while estate agents work on marketing your home to sell it and chase up your buyers and solicitors in the process. If you’re the one buying, your solicitor will still deal with all the contracts and the estate agent will likely keep you informed on how the sale is moving along.
When you find a house you like, or someone likes yours, an offer will be made. This can be negotiated and often is. However, it’s not binding at all. In fact, as you probably know, a house sale in England is only legally binding upon exchange of contracts and completion. This means that from putting your house on the market all the way up until exchanging contracts, anything could happen. And there’s not much you can do about it… until HonestyBox was created, but more on us later!
Buying and selling a house in Scotland
Over the border in Scotland, things look a little different. First of all, solicitors play a much more in-depth role within the housing market. Often, solicitors will be the ones selling the houses rather than estate agents. Straightaway, you can see how this cuts out a middleman. Although, it could also be seen as a negative. Estate agents offer their services solely to market and sell your property and can, therefore, focus all their energy on the success of your sale.
Once an offer has been made on a property in Scotland, the parties involved have to sign some documents that don’t exist in England or Wales. These documents are called ‘missives’ and essentially exist to bind the transaction early on. As we have seen, the time between making an offer and exchanging contracts is where most of the problems lie for property buyers and sellers in England. However, in Scotland, missives have definitely prevented the uncertainty and unfortunate cases of gazumping/gazundering.
Buying and selling a house in the US
We thought we’d travel even further and take a look at the housing marketing in the USA. As you might expect, it’s a whole different ball game. It’s important to recognise that the exact house buying process can differ from state to state, as each has its own rules and regulations. But we’re going to give you a general overview of the property system over the pond. First things first, what we know as estate agents are called ‘realtors’ and they deal with the real estate market. You don’t have to buy through a realtor but it’s recommended that one represents you. There aren’t any solicitors in America either, you’d be dealing with a property or real estate lawyer – in some states, this is mandatory and you’re not allowed to go through the conveyancing alone.
Before a property is bought in the US, buyers must ‘bid’ on it. This can result in a bidding war between any prospective buyers if the house is a popular choice. Obviously, this can be a stressful process but once someone has ‘won’ and the offer has been accepted, the sales process can begin. Often, house buyers in the US, along with their attorneys, can draw up a real estate contract. As long as all the correct information is on there with a date and consenting signatures, the house sale is then legally binding. And you can probably guess what happens in America if a contract is broken. Yep, they go to court!
There’s nothing legally binding in England
We all know that there really isn’t anything like the US contracts, or the missives in Scotland, when you buy or sell property in England. Perhaps that’s why there’s such a problem with sales falling through and families missing out on their dream homes. We created the HonestyBox to try and help with this problem. HonestyBox is designed to give security from day one. Aiming to remove the stress and worry while waiting for the exchange of contracts, we want to try and reduce the occurrences of gazumping and gazundering in the UK property market.Get in touch