The concept of fall-throughs in property transactions is nothing new, but for too long it has been rather accepted as par for the course, as an inevitability that can’t be helped.
While it’s certainly true that it’s impossible to completely prevent property sales collapsing, the number of fall-throughs each year remain staggeringly high.
Figures vary slightly, but the general consensus is that around a third (33%) of sales fall through each year, with considerable financial, emotional and psychological damage attached to this.
The reasons for fall-throughs are many and varied – buyers or sellers getting cold feet, a sudden change in circumstances, issues with the home thrown up by surveys, a sudden change of heart, etc – while practices like gazundering and gazumping, perfectly legal in England and Wales but also very controversial, can also cause havoc for property sales.
The cost of fall-throughs has been put at anywhere between £600 million and £800 million a year, a truly massive number by any reckoning. Recent research suggested that 34% of house sales fell through last year, with up to £2,000 wasted on associated costs such as legal and surveying fees.
The amount of time it takes to complete a transaction – currently around 150 days – is also likely to be having an impact on the number of sales collapsing, as it gives more time for either buyer or seller to back out or become frustrated at the lack of progress.
While the impact on consumers of sales falling-through can be significant and costly, there is also the knock-on impact for estate agents and conveyancers, who are likely to have spent a sizeable chunk of time on a sale that ultimately collapses.
The importance of chain transparency
Back in October 2017, what was then known as the Ministry of Housing, Communities and Local Government (MHCLG) – now the Department for Levelling Up, Housing and Communities – launched a call for evidence seeking the views of industry and the public on how the home buying and selling process could be improved. The consultation ran for eight weeks, with the BEIS research report: ‘Buying and selling homes: consumer experience study’ used to inform the Call for Evidence.
In response to the call for evidence, in April 2018, the government of the time said: “We agree with those respondents who suggested that conveyancers should be encouraged to move towards using a digital platform that allows them to communicate more easily and have a chain view, and will be working with industry to make this happen.”
There was a big focus in the government’s response on improving chain transparency. It said there ‘was a clear body of support’ for some form of ‘chain view’, offering buyers and sellers in the chain insight into the status of everyone else.
“We want to work with industry and PropTech companies to investigate how the process can be improved and this will be one of the propositions this group can consider,” it added.
While this report was from a few years ago now, many of its findings still hold true, with chain complexity and issues with the breaking down of chains still prominent when it comes to sales falling through or buyers or sellers withdrawing from the process.
One way round this is to make it clear as mud to all parties in chain where they currently stand. This helps prevent fall-through because sellers and buyers are then likely to be much more patient if they know what is happening, and if communication is strong, clear and consistent throughout.
At present, however, current case management systems only highlight one part of one transaction. ViewMyChain is entirely different in that we enable both parts of the transaction to be shown as well as all the transactions in the chain.
When it comes to sales progression, this is vital as all parties in the transaction can quickly and easily identify the stage at which each part of the chain is at. That, in turn, enables action to be taken to speed up part of a chain if it is seriously hampering the rest of it.
Traditional sales progression can take time, effort and a fair bit of stress, so a platform which can assist with this not only helps to strip this away but also saves significant costs in terms of automating time-heavy processes.
Psychology plays a vital role in all this, too. If buyers and sellers feel like a deal is happening, or on the right path, or at least showing some signs of life and progress, it’s less likely that they’ll get itchy feet. Time impacts on sales, especially if there is little to no communication.
Moving from one agent to another
Another element that often leads to the collapse of sales is sellers deciding to move between agents, which can cost agents a significant amount.
This often occurs because a seller feels frustrated with their agent and feels not enough is being done to progress a sale towards completion.
It is something that can be avoided, however, by again implementing much higher levels of transparency to the seller so that they are more patient if and when delays happen. Unfortunately, delays are part and parcel of the home buying and selling process – and something that will never be eradicated completely – but by keeping them updated with where their transaction is on a regular basis, the chances of them walking away or switching agents are diminished.
Here at ViewMyChain, we are a platform dedicated to radically improving the current home moving process. This is done by allowing agents, buyers and sellers to view automated key buying and selling milestones such as searches being ordered or mortgages applied for, so that everyone is kept much more aware of what is going on.
This chain transparency, or chain view, can help agents achieve lower fall-throughs, faster completions and less wastage.