A proptech firm has suggested that the government’s recent decision to stamp out gazumping with ‘voluntary reservation agreements’ is a significantly behind the digital curve.
Gazeal says its service, which enables a vendor and buyer to enter into a legally-binding contract at an early stage of the sales process offers a solution to gazumping and is “already working”.
The company says its system prevents 100% of sales falling through against an industry average of over 33%, although in some markets it can peak at nearly 40%.
This it says is because usually neither party is legally bound into the process for between four and 12 weeks prior to the exchange of contracts.
Consequently it claims £270 million is wasted every year by buyers on surveys and other expenses for purchases that eventually fall through.
Unsurprisingly, government research therefore reveals that 70% of house hunters would welcome a system that eliminates gazumping – which Gazeal says it already provides.
Its service reduces the transaction period on average from 77 to 35 days, the company claims.
“Our research shows that the cost per failed transaction per household is over £1,000 on average and this can be totally avoided by using our legally binding agreement,” says Duncan Samuel, Managing Director of Gazeal (left).
“The Government seems determined to improve the housing transaction process and we fully support that.
“[But our] system goes further – even removing the Caveat Emptor rule in that we guarantee the title on house purchases. Under the existing system buyers or their solicitors have to check the title to ensure its ‘good’. We insure that risk.”
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