Property expert Phil Spencer has teamed up with proptech company Gazeal to help his users through the sales process with less chance of last-minute issues.
Phil Spencer has flagged up the “point of contention” in the current buying and selling system in UK property, where buyers, sellers and agents can invest money and time in a property transaction only for it to fall through shortly before exchange of contracts. This is what has led the property expert to join forces with Gazeal, a company which offers exchange of contracts at the start of the process, minimising the risk of a sale falling through.
Best known for his appearances on Channel 4 shows like Location, Location, Location, Phil Spencer now runs property advice service MoveIQ which offers tips on buying, selling, renting and moving house.
Preventing frustration and expense
Speaking on the new partnership, he commented: “Whatever the market conditions, the real culprit is the legal blind spot in the way homes are bought and sold in England and Wales.
“A legal system that allows buyers or sellers to abandon a sale a day before the exchange has always been a point of contention. That’s why Move iQ has teamed up with Gazeal, who offer a legally enforceable contract at the very start of the process.
“Allowing sellers and buyers to agree a deal that has legal force right from the start can spare weeks of uncertainty and prevent frustration and expense – all symptoms of gazumping and gazundering.”
“Not only that but it’s also good for the traditional estate agent who can often be left with no fee despite committing huge amounts of time and effort on behalf of their client.”
Gazumping and gazundering
An estimated 300,000 property transactions in England and Wales fall through each year, costing sellers on average almost £3,000. This can be due to ‘gazundering‘, where buyers lower their asking price just before exchange of contracts. Gazumping is another issue, where a seller who had agreed a price with a buyer subsequently accepts a higher offer from another buyer.
The longer it takes for a buyer and seller to exchange contracts, says Gazeal, the more likely it is that the sale will fall through.
How does the new system work?
Gazeal’s solution is to offer a full legal pack, including searches, the contract and protocol forms, all of which are completed online by the seller. When a serious buyer views the property and is ready to make an offer, they are given an opportunity to review the entire pack free of charge, allowing them to make a fully informed offer. They then select a conveyancer, and the entire pack is sent immediately in digital format, saving weeks or even months.
If they wish, the buyer and seller can then enter a legally binding reservation agreement, subject only to Lender’s Valuation and confirmation of Good Title, which takes gazumping and gazundering out of the equation.
Duncan Samuel, managing director at Gazeal, commented: “We have designed a system that’s cost effective for the buyer and seller and will save them the agony of fall throughs. We are delighted that such a prominent property expert as Phil Spencer via Move iQ, sees the value in what we are offering.
“This is an agent friendly system, already embraced by several large estate agent chains. The contract gives both buyer and seller certainty, so you question that if a party doesn’t sign a Gazeal agreement, are they serious or just toe-dippers?”
To read our guest article by Gazeal’s sales and digital marketing director Steve Dawkins, follow this link.