A London estate agency specialising in new builds that has been using Reservation Agreements for some time has claimed that they speed up sales and help weed out disingenuous buyers.
The claim has been made by Chris Osmond, sales director at six-branch London estate agency Johns & Co which specialises in selling new builds including within the fast-regenerating area of Nine Elms (above).
Johns & Co asks buyers for a £2,000 reservation agreement deposit for properties for sale at less than £1 million and £5,000 for those worth more.
Osmond claims that sellers support Reservation Agreements because they ensure a committed buyer and speed up the process – the company claims a nine-week average turnaround from agreed sale to exchange of contracts.
Johns & Co, which was established in 2013, also claims that its fall-through rate is 20% compared to the industry average of 30%.
“Fall-throughs are a blight for all involved. They result in an aborted sale which is, of course, disappointing and they cost money for the buyer and seller,” Osmond (left) claims in a blog published yesterday on the Mortgage Strategy website.
“We estimate the average cost of a fall-through is £2,000 and higher for leasehold properties where there’s more paperwork and therefore higher charges.
“All this being said, and while RAs are not a golden ticket to a guaranteed sale, they most certainly contribute to a smoother and more transparent sale than deals done without them.
“For that reason, we are wholly supportive of the government’s trial and we hope to see RAs become more commonplace in the market, building trust and confidence in our industry.”
Read more about Reservation Agreements.