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The cost of aborted transactions means they must be kept to a bare minimum – Rudolf

by: Beth Rudolf, director of delivery at the Conveyancing Association
  • 07/09/2020
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The cost of aborted transactions means they must be kept to a bare minimum – Rudolf
I’m hearing a lot of positive noises from property professionals about the current state of the marketplace: strong demand, motivated buyers and sellers, and – perhaps with the exception of high loan to value mortgages – a competitive mortgage market.

 

That said, I’m also hearing frustration around some of the operational issues advisers are having with lenders. Concerns include the aforementioned lack of products in certain sectors, and the perceived unlevel playing field in terms of offerings through certain distribution channels and indeed in terms of government support (or otherwise) in different countries.

Some of these issues seemed somehow inevitable, especially with the lockdown situation, social distancing, workplace issues changing the very nature of the market and what can be achieved.

However, there are some property market problems that have been with us a long time, and which continue to frustrate all stakeholders, particularly as it is within our means to eradicate many of them.

The prime example of this is the sheer number of aborted transactions we have every single year, the huge costs they incur, and the lost income they inevitably result in.

What will frustrate mortgage advisers is these cases often look destined to complete without any hitches, only to end up on the scrapheap.

At a time when I’m sure you want to make the most of any case which is ‘complete-able’ to have them fall through – through no fault of your own or perhaps your client – will raise the hackles of even the most patient of advisers.

Recent research suggested the most common reasons for an aborted transaction are around buyers changing their mind, sellers pulling out due to the speed of the process, and gazumping. It does not take a genius to work out that there are measures that could be put in place to stop all the above.

Better upfront information giving a clear picture of what buyers are getting, the potential use of reservation agreements to secure greater commitment between buyer and seller, greater use of technology within the conveyancing process to speed it up, are hardly the stuff of science fiction.

The good news is that there is a far greater level of buy-in and commitment to improving the experience of all stakeholders within the homebuying process.

Great strides have already been made and we are getting there, but it will still need the agents, lenders, advisers, conveyancers and government, to keep pushing to ensure that the number of fall-throughs is nowhere near the current level.

A lot of commentators talk about what should be the major takeaways post-lockdown in the housing market; my view is that getting the process right to ensure aborted transactions are always at a bare minimum, has to be the major goal.

The benefits of getting this right will be seen by all practitioners and all clients for many years to come, and now is the time to deliver.

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