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Vendor disclosure will speed up housing transactions and increase broker income – Rudolf

by: Beth Rudolf, director of delivery at the Conveyancing Association (CA)
  • 23/04/2021
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Vendor disclosure will speed up housing transactions and increase broker income – Rudolf
How do you look at change? Do you look at change and say "yay" or "no way"?

 

There is another option – perhaps you look at change as “a necessary evil”?

But what about change as “a necessary good?” Because I suspect there will be no housing or mortgage market stakeholder who wouldn’t think change is required in the home buying and selling process in order to make it more efficient and to greatly speed it up.

That momentum for change, and for the acceptance of it, appears to be growing right across the board.

The last 12 months has presented a unique set of challenges to overcome but no-one in their right mind would think that 22 weeks to complete a housing transaction was anything but overly long.

And I take on board the extreme nature of the environment in which we’ve all been working, but even before the pandemic, the number of weeks to complete wasn’t very much less.

We have a unique opportunity to bring together a variety of changes which will ultimately help us all, because the quicker we complete, the more efficient we are, the quicker we get paid, and the more clients we can work with.

You don’t need to be purely altruistic about buying into this change – it fundamentally should mean increased income for your business.

 

Upfront information

The foundation of this change has to be much better upfront information at the point of marketing. In other legal jurisdictions they already do this, which means when the buyer makes their offer, they’ve already checked the legal suitability and their financial position as they’ve been able to check the lender’s acceptance of the property.

Which means that an offer to buy can be binding with a short cooling-off period.

In those jurisdictions where they have upfront information and binding offers, chains – in the sense of a chain of transactions synchronising around exchange of contracts – effectively disappear.

Instead, there is a synchronisation on the completion dates so people can still move from one property into the next.

This is achievable because as soon as they get an offer on their property, they can check they can get a loan on the property they want to move into, and that it meets their intended use and enjoyment, as required.

Then they can accept the offer on their sale and make the offer on their purchase with the completion date agreed through the transactions.

 

Support vendor disclosure

The Law Commission is currently consulting on its 14th Programme of Law Reform and has included the home moving process and vendor disclosure within that consultation.

If enough of the industry supports vendor disclosure then the delivery of the current obligation on the estate agent to provide the material facts becomes a whole lot easier because the seller will be liable to provide the information at the point of marketing.

That would save weeks in delay immediately – instead of various stakeholders coming to this late, and everyone having to wait while they secured the necessary documents, it would all be ready from the get-go.

As you can see, this is not change for change’s sake but to deliver a better customer and industry experience, to speed up the whole process, and get us where we need to be.

It is also likely to put more money in your pocket. What’s not to like?

 

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