Figures were released last week following a trial that clearly showed what happens when upfront searches are provided at the point of a property going under offer. They are, frankly, stunning.
As an agent, how many times have you been asked by a buyer “Will you now stop showing the property” when their offer is accepted. Replies have always explored a grey area insofar as any good agent will realise more than a third of sales will fall through and so want keep options open, it’s an ongoing conundrum and one that’s always difficult with excited buyers.
Phil Priest at 4Corners, a conveyancing business in Halesowen, decided to actually do something about it, rather than sit around talking – there’s been enough of that.
What he did was offer buyers an incentive. If they paid for upfront searches the property would be taken off the market. Some 200 buyers were offered and 50 accepted. They each paid £275 for upfront searches and what happened subsequently can leave little doubt as to its efficacy.
The 25% who did, completed their purchase in 79 days – without a single fall through. Those who didn’t take up the offer took 41 days longer and 42% fell through.
Now 200 isn’t huge BUT, this would seem unequivocal and offer both agents, buyers and sellers what they’ve been looking for – more certainty and speed. Suggestions in the past have centred around putting down a non-refundable deposit, but this has always been open ended and subject to two sets of lawyers agreeing on what constitutes non-refundable. Putting together packs is long winded and introduces even more uncertainty over what individual conveyancers will accept. If just providing upfront Searches works as well as this trial suggests, then why go further.
I’m sure there’ll be those looking to poke a hole in this and am grateful to the irrepressible Tim Main of PIP for telling me about the trial, but so long as solicitors accept the source of such Searches – and there would seem no reason not to given the ubiquity of such sources these days – why wouldn’t all agents adopt such a course of action.
Ed Mead is the founder of Viewber
Some comments from conveyancers and a compliance expert:
“I’ll always give a client the choice of when to instruct searches. I cannot recall offhand any client ever wanting me to instruct searches without me first having checked the title for material issues.”
“I also offer to hold off applying for searches until the survey has been carried out.”
“I remember when reviewing some referral agreements some time ago, finding clauses that said upfront payments were to be made by clients to the estate agent referrers for searches, upfront legal fees, etc., which just happened to equate to the referral fee that was to be paid by the law firm; totally in breach and done so the referrers could get their money quick and wouldn’t need to chase law firms later for the fees!”
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A comment from a highly respect conveyancer last week.
‘Once we receive the MoS, on average, it takes at least three weeks chasing the buyer to get money on account. Estate Agents are particularly good at selling additional services, perhaps a joined-up approach would resolve this issue?’
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I couldn’t agree more Nicholas regarding a joined up approach.
There isn’t anything in life we can purchase without a deposit, yet a property costing £500k can be agreed on without any commitment.
As Tim Main MRICS commented to me last week “You’ve proved the benefits of a reservation agreement without the complexity and confusion, simples!”
One thing we fail to appreciate is the impact of the antiquated processes we have in place affect the end clients in such a negative way.
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Cannot abide solicitors who wait until the mortgage offer is in before doing anything. Adds weeks onto a transaction and gives everyone needless stress. To be honest, if a buyer has such little faith they can get a mortgage, why take the property off of the market?
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Most people are reluctant to spend money, of course they are. But when they appreciate the information that they are getting and how it can impact upon their desire to proceed, they get involved much faster.
Searches have been part of a secret process ‘owned’ by conveyancers that makes home movers believe that they are not of interest to them. Surely they are just part of the process….wrong!
When we get involved, or are discovered by home movers, they get involved very quickly. Not only do buyers that engage with searches themselves show an absolute commitment to the process, but their transactions usually go faster.
We are committed to conveyancers to provide FREE solutions to their introducers to enable sellers to get better prepared (documents, searches etc) get sellers involved with conveyancers far sooner when considering selling and to empower estate agents to drive positive engagement in transactions.
We need a few more progressive champions to help drive change by leading the charge.
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If you took three solicitors from the 1900’s, told them how easily technology could provide most of the information required for a conveyance before the house was even on the market, I am quite certain they would say’ why are you still doing it the way we did it!’
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As we know the system here is archaic and laughable, but sadly why the country is on a downward spiral, will anyone change things ? the industry or the Government No.
What takes a month here takes a week in the civilised World..
ps I’m living in Portugal now
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Typically backward of solicitors to say that they will wait until the survey is done before applying for searches. Surely it’s best to get the searches back first as they are cheaper and if there’s anything wrong, they can save their client a survey fee.
I think it’s a great idea to have upfront searches as long as they have a decent expiry date. Any non-refundable expenses shows intent to purchase.
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a question easily answered- rivalry to be dominant in an emerging space and the burning desire for the status quo not to change.
Contract prepared-searches on instruction was established, trialled and successfully adopted 3 years ago by one firm I know, the evidence I could see independently showed how it enabled the agency to win market dominating market share, enjoy unrivalled completion ratios and peel weeks and weeks of the time between memo of sale and exchange
There are already several contract ready systems in place competing and doing well but when all that was evidenced to the HSBG meetings it was as if there was a polite but deliberate attempt to stall progress while those left behind developed their own offering.
I did the maths- as I always do, there are 300 million (180 million profit) reasons why the process should change and 300 million reasons why some people are trying to make sure it doesn’t change….. just yet and until they can find a way of the work being done as it’s always been done.
What you’er describing Ed is another trial, another reinforcement of the change that is inevitable, change that I was discussing in 2018. Once agents realise the £opportunity open to them, things will change
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This most striking thing about this pilot is that agents have been able to get buyers to commit to spending money getting prepared.
When HIPS were abolished, I remember someone at the forefront of the campaign to abolish them ( no names obviously 😉 ) saying that if they were so good, then people would pay for them voluntarily. At the time I disagreed.
I’d LOVE to be proved wrong – well done to Phil and the team – 25% takeup is remarkable.
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Thank you Peter.
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Surely it is only right to explain to a potential buyer of the pros and cons of paying for searches up front (so they can make an informed choice). If that isn’t done and there is a title, survey, or mortgage issue, they can quite rightly ask why they weren’t told they might lose their money.
Searches ae of course technically out of date the day they are received, but most lenders will allow a search to be used if it is no more than 6 months old. What we now need are a couple of search providers to say if a transaction can’t proceed for genuine title, survey, or mortgage issues they will refund the cost of the search, or at least part of it.
Peter is correct, if agents can convince buyers to pay for searches up front why can they not convince seller’s to procure a seller’s pack, which would probably not cost a lot more. Or at least offer a drop-down list of products that will help, buyer and/or seller?
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Of course there’s more that could be ‘put’ in to a pack – but it’s exactly that complication that will put anyone off [and is one of the main reasons HIPs failed]. KISS is the way forward, and of course the £275 Searches paid upfront by a buyer can probably be sold on if deal does fall through. It also gives the agent a way to get commitment and ‘stop showing’. Still not sure why anyone wants to complicate this – the trial is pretty conclusive wouldn’t you say?
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The main reason HIPs failed is that they contained either the wrong information or not enough information. They were not fit for purpose for either a buyer or their conveyancer. But, that could have been easily fixed.
A seller should show commitment by ordering a sellers pack, and a buyer should show commitment by paying for the search element of that pack.
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One point is how simple this is and incurs no extra cost. It achieves the benefits of a reservation agreement without the cost or ambiguity. As with so many things it is the simple things that work.
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Burn the looms!!!! Burn them?
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Looms, or loons?
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Both?
What most people don’t realise, haven’t realised yet is how the whole material information project demands searches on instruction, there’s no point waiting to 6 weeks into conveyancing (or 12 months in Hackney) to find reason while a sale cannot proceed for reasons that were available to the agent when a home was listed.
Even the time taken for searches in a particular area is material information
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Exactly Robert, it is one issue caused by Solicitors waiting on average up to 8 weeks to ‘onboard’ the client and carry out other checks and wait for mortgage offers, surveys etc
Add that to the local search time for a council search which can be on average 4 weeks, good times a few days and others 8 weeks and counting, excluding Hackney which is a nightmare itself.
Simply by ordering a necessary key bit of information earlier speeds up the process.
You could argue that searches aren’t ordered without a survey, but then a survey isn’t ordered with searches…
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We publish the NLIS data and Regulated Search Turnaround times data every Tuesday for all to see. Not sure where your averages are coming from but last week the averages across the 343 council areas for a Council sourced search was 15.17 working days (3 working weeks) and for a Regulated Search was 9.21 working days (less than 2 working weeks). If you remove the Hackney timescales the days are 14.65 working days and 8.69 working days respectively. Who works on averages though?? We provide full transparency of this data to dispel any myths within every marketplace. Even Peter Ambrose was recorded on YouTube to say that on occasion conveyancers like to hide behind a supposed search delay…roughly translated as, didn’t order them until just now. We like to remove all doubt at Property Searches Direct by delivering this transparency for all to see.
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If I offered a property and it was not taken off the market I would not spend a penny on it and find something else
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Buyers need to be made aware of defects in a property and see the sight of Searches immediately. What’s the point of waiting for a mortgage offer before commissioning them, what a waste of time and effort for all parties. Searches can be commissioned independently online by the buyer as soon as an offer is agreed upon a great way of determining serious buyers from those that are hedging their bets.
Search turnaround times vary wildly between local authorities but are now publicly available and updated each week.
I believe that savvy estate agents (particularly in a falling market) need to embrace upfront information and strategic search purchases to differentiate their services.
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Statistics can be very misleading. Initial thoughts:
Why did the three quarters of buyers not choose to pay upfront for searches? Was it because the sellers were yet to find a property, or they themselves were unsold? What percentage of the ‘dids’ and ‘did-nots’ were chain free and/or were buying a chain free property (therefore, stood a better chance of exchanging contracts quickly and at the same time at less risk of falling-through)? And why did the 42% of sales fall-through? Was it because the sellers or buyers could not complete their chain? If so, surely the buyer did the right thing by not wasting £275 on upfront searches?
Did PIP and/or the estate agents add or receive a ‘service charge’, referral fee, or any other charges on top of the cost of the actual searches? Could they?
Would agents suggest accepting offers only from buyers who have paid for searches, despite whether the seller has found or wants to move quickly. For example, a seller might not be able to complete for over six months because they are dealing with a probate application?
Will we see more complaints to the ombudsman due to:
– searches expiring before completion and the agent not disclosing material information that would have affected the buyer’s decision to submit upfront searches (see above example)
– being recommended to buy regulated searches when it transpires their lender will only accept official searches
How about estate agents or their vendors submit searches whilst preparing to launch the property, then sell copies to all the prospective buyers?
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aSalesAgent
2 quick points. Firstly when i was selling houses when the sale was agreed the buyer was agreeing to put their solicitor in funds for searches straight away. So no change in the risk for them. Secondly we are launching funded searches for sellers, so as you say in your last para there can be seen by buyers before hey offer. Tim Main
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Great points and valid questions on all points.
The properties on a majority were involved in chains, only a couple were chain free.
The reason for only 25% is mainly due to education on the agents side, it’s a change of habit more than anything else.
If searches expire then they are replaced for free, no additional costs should be incurred by the buyer.
As for the 42% fall through rate, this is in line with the industry. We happen to ignore that the No.1 emotion suffered by both Vendors and Buyers is FEAR.
Vendors fear the buyer pulling out as they are not committed and keep looking for other properties.
Buyers fear the seller accepting a higher offer and getting gazumped.
When you look back to 2016, the average time to completion was 12 weeks and fall through rate of 20%. How have we now ended up with an average of 23 weeks and fall through rates of 40%+.
Happy to chat over this in detail, drop me a connection on LinkedIn.
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“If searches expire then they are replaced for free, no additional costs should be incurred by the buyer.” Who pays? The local authority will not renew the search without payment. The Environmental searches will not be renewed for nothing. Who then should bear the cost? The cause of the delay leading to expiry may be the action or inaction on the buyer’s side. Why should the buyer not pay the cost of renewing in those circumstances?
If search insurance is used, preferably by reference to a recent (i.e. less than 2 years old) local search the process could be speeded up and insurance taken out at the point of exchange.
Many buyers will criticise their solicitor for incurring the search fees if the sale falls through because they cannot get a mortgage offer which is why many solicitors delay submitting them. Lenders are much more picky than they used to be and that can add to the delays and the percentage of sales falling through,
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I believe that searches should be paid for by the seller so that they are available to be scrutinised by the buyer and be available as part of the contract. Depending on how old they are, a new set should be paid for by the buyer. Buyers MUST show a financial commitment to the transaction.
Estate agents should ensure that NO sale is agreed to a buyer who does not have an agreement in principal. Too many sales are being agreed in the hopes that they will come together which has lead to apprehension and delay during the conveyance. Estate agents MUST do more to better prepare sellers and only agree sales to qualified and better prepared buyers.
Estate Agents have to wake up and realise just how many of the cards they are holding. Positive change and progress is in reach if they’d just admit that they should do more to help out. Estate Agency should not just be about getting an offer agreed and for all the hard stuff to be handled by the conveyancer. It’s simply not fair that legal teams take all the stick whilst agents are patting themselves on the back and screaming at conveyancers when delays occur….that could have been avoided.
We run a mailing list to update anyone that wants to know about all of the Local Authority Search Turnaround timescales in every local authority for council sourced (official) and regulated (personal) searches. Having sponsored the EA Masters 2022 we were provided with a list of delegate contacts that we added to that mailing list. AMAZING just how many agents unsubscribed as they could not see the importance of knowing that information. As an Ex-Estate Agent myself I was ashamed by where the industry has gone and how little they care about information that could impact their pipelines and their clients.
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We provide Estate Agents with the ability for their clients to gain direct access to search ordering.
With the push for more up front data, to have sight of an Environmental Report, Drainage & Water report and Local Authority Search when a property is marketed will help buyers make informed decisions. It makes sense that sellers buy these as part of going to the market. It shows their commitment to sell. How many sellers that are not that serious get to waste agents time and money without spending a penny of their own cash?
All agents MUST focus more on winning a dedicated stock of sellers, rather than a draw full of ‘give it a go-ers’.
As soon as a sale is agreed, the buyer should financially commit to the searches…why? Because it shows their commitment to the transaction.
The Searches that are distributed with the contract, already in-hand by the seller, can be used as the buyer has contributed and, there are funds available to update anything that looks like it might expire due to delays.
IF any Agent wants to discuss how we can help them get in touch with me at Property Searches Direct.
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Mork calling Orson, come in Orson…..
I like to think that I speak fluent agency, at least in the dialect of the areas in which I’ve worked. This thread might as well be in Chinese.
1. Buying is expensive, 300 odd quid for searches is nothing in the whole scheme of things, I’ve always expected, and received, that sols ask for money on account for searches once client authorisation has been sorted.
2. The suggestion that sols are so concerned about their clients wellbeing that they refuse to order searches until receipt of mortgage offer is laughable.
3. The pernicious annoyance is that in the last decade or so some sols have decided not to raise any enqs until receipt of searches, essentially mothballing the file for up to six weeks following the issue of MOS.
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So why do you not, as an agent, take more control? Engage with the ordering of the searches yourselves and overcome that mothballing?
I find the thought that estate agents are keen to improve the status quo just as laughable as so many will say the right things and then do nothing about it. It’s far easier to say that conveyancers are the problem rather than get involved with making things better for the client.
Most solicitors will not take any funds on account and open a ledger until they have a contract from the other side. The reason why they will not get a contract for so many weeks is that Estate Agents do not prepare their clients well enough and paperwork is yet to be found by the seller. IF Sellers were contact ready, and buyers were financial qualified and ready to engage, transactions would move at a much better pace. But it takes a good Estate Agent to make that happen….and they are like the British Saddleback Pig, a rare breed at risk of extinction?
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Totally endorse the agent taking some control themselves. The joy is the process is so simple and agents can set up in an matter of minutes.
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Sorry bruv, not buying it.
On top of listing, managing expectations, physically viewing and (hopefully) negotiating a sale to the point of MOS, supplying all parties with contact info and chain sheet, you want us to what?
All buyers are financially qualified in terms of proof of cash/DIP/AIP
What paperwork outstanding results in a 6 week delay in getting a contract out?
Again, I’m sorry but all I’m hearing is mandarin.
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I’m not selling. Therein lies the estate agent….its not all just about the sale. I don’t need you, the agent, to do any more as it is the client that has to do the work… they simply need to know where to start.
You can either empower them through the use of a FREE to client Digital Logbook or get the client to instruct a conveyancer before the property goes to the market.
So a conveyancer, when instructed ‘after’ a sale being agreed knows nothing about the client or their property. They send a trees worth of paperwork out that takes the client by surprise and they put it to one side for the weekend, perhaps.
When completing the paperwork, which takes time, they realise that there is a load of supporting documentation that they must put their hands on, FENSA certificated, building control / completion certificates, installation records, guarantees and so on. The list can be overwhelming. All of this invariably is happening under pressure when they have a sale agreed.
IF, they had been given the chance to complete this paperwork AND find the supporting evidences whilst marketing, they would be far less stressed and far better prepared.
I agree that SOME of it may not delay an initial contract pack, but when the evidences are seen to be missing, time consuming enquiries and requests are then made and need to be managed…what a ball-ache they can be.
Many of our clients have told us of having to wait 2 or more months for a contract…why could that be if a sale has been agreed and a client is prepared? IF it was all together in the first instance, the transaction would happen faster.
I’d recommend you spending some time with a friendly local conveyancer and finding out how you can actually help, rather than denying the delays that you can control and help to eliminate.
You’d hear far better if you took your fingers out of your ears and stopped saying LA LA LA LA to the issues you could help to fix. I hope that’s plain English for you ‘Bruv’.
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. I hope that’s plain English for you ‘Bruv’.
have I touched a nerve sweetheart?
Look, I’m not spoiling for a fight, quite the reverse, however instructing sols early, pre-packs, HIPS etc is not new and has merit granted. I have assisted plenty of people in answering enqs when they feel out of their depth. Often, the best advice to them when completing forms is ” not known ” if they genuinely don’t know, that will trigger:
1) The other side takes a view on whether to accept that fact.
2) The lender has a hissy fit and it’s time for sales progression to dig in.
3) Defective title indemnity policy
A decent proportion of the market has no incumbent, part ex / probate / repo / new build / 2nd home / airbnb / etc
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No thanks. Just tried to use your site. Too much of it doesn’t work.
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aSalesAgent
Not a good start. The reason I picked up on these figures when talking to Phil Priest at 4Corners is it can be so simple. We were getting our UpFrontSearches for agents ready anyway. Do look at PIPhome we want this to work for you and your business. Our process is as simple as register your business and open a PIPVault for each property, we order and fund the searches. It takes a couple of mins.
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My last comment above was in response to another service provider who was spamming this thread with their brand name and has since had their comments removed. I’ve not returned to your own site since I first heard about PIP Vault a year or two ago.
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