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Conveyancing platform questions reservation agreements

Although popular with consumers, reservation agreements could prove difficult to implement unless the reasons why people can withdraw are clearly set out, says Reallymoving.com.

Nigel Lewis

reservation agreements

The government’s recently-revealed plans to introduce reservation agreements into the sales market have been questioned by a leading home moving platform.

The CEO of Reallymoving.com Rob Houghton says the agreements will be difficult to enforce unless there are clear guidelines on what constitutes a ‘legitimate reason to withdraw’.

The proposed reservation agreements are to be piloted in January and could be introduced next year. At the moment they are expected to be voluntary rather than mandatory.

During a speech last month, housing minister Matt Prior claimed some estate agents were against the agreements because they would reduce the number of homes they could list as ‘sold subject to contract’ even though at least a third of them do not make it to exchange.

Research published today by Reallymoving.com reveals two thirds of buyers and vendors support reservation agreements being introduced, which would require both sides to place a cash deposit when a sale is agreed.

Changing minds

The survey has also highlighted the main reasons why sales fall through prior to exchange including people changing their mind (29%), survey problems (17%), difficulties getting a mortgage (15%) and issues up or down the chain (11%).

But gazundering and gazumping are not the problems many housing market experts claim they are. Only 8% of those canvassed had been gazundered while only 7% had been gazumped.

“To save the millions of pounds wasted through collapsed deals every year and to foster renewed trust between buyers and sellers, change is urgently required,” says Rob Houghton, CEO of Reallymoving.com (left).

“Reservation Agreements would undoubtedly prompt people to think hard about their commitment to the process, which can only be a good thing.”

November 5, 2019

One comment

  1. The results of this survey totally support that the process has to change. Reservation Agreements will ONLY work alongside more information about a property being available. Information being presented in a simple digestible format for potential buyers to understand will fuel the desire to enter an agreement to secure the sale before exchange occurs. Gazeal already have this covered.

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