Estate agents are a misunderstood bunch.
Now I have your attention, let me explain why, and how Phil and Kirsty are largely to blame.
Phil Spencer and Kirstie Allsopp are celebrating 20 years of presenting Channel 4’s Location, Location, Location on screen, but they are not estate agents in the usual sense. They are property finders working nationwide for prospective buyers, not the sellers. Their job is to select properties based on their clients’ requirements, knocking on doors and searching estate agents’ listings on behalf of buyers who pay the property finder commission, or a finder’s fee, when successful.
Another such programme is the cosy Escape to the Country, on which one of the presenters, Jonnie Irwin, is a qualified building surveyor with a degree in estate management. Fellow presenters include Jules Hudson, who trained as an archaeologist, and singer Aled Jones, who is better known for flying with snowmen.
Not that a property background is necessary to present these programmes, although Phil Spencer was an estate agent in his Kentish home town of Canterbury before gaining a degree in General Practice Surveying. He then founded Garrington Home Finders in 1996, remaining CEO for 12 years and working specifically on behalf of purchasers.
Kirstie Allsopp is the eldest child of the 6th Baron Hindlip, meaning she is permitted the courtesy title of ‘The Honourable’. She has worked in interior design and as an editorial assistant for Country Living magazine. In 1996, she launched the former home-search company called Kimir, focusing on central and west London.
The two of them were approached individually as consultants in the embryonic stage of Location, Location, Location and subsequently chosen as the programme’s presenters.
But do these property programmes confuse some house hunters? Locally, at least, some cannot understand why estate agents are not driving them about, taking them down the pub for a pint and making on-the-spot calls with take-it-or-leave-it offers.
Estate agents in the traditional sense gladly oblige and befriend buyers as part of matching them with existing and new-to-market properties, but they are being paid by the owners wanting to sell. Any confusion about this can have serious ramifications. It is known for buyers to make an offer and also say, as often seen on television, ‘We’ll pay more if we must but let’s see if the owner will accept a lower offer’. The estate agent is duty-bound to make the houseowner aware of this. Not so Phil and Kirstie.
Which leads to the topical subject of gazumping. Criticism rains down upon estate agents who put forward alternative offers when a houseowner has already agreed on a price to sell.
Now turn this around. If the estate agent does not submit the higher offer, especially in an island the size of Guernsey, there is nothing stopping someone complaining to the houseowner, who as a result has been excluded in the legal sense and could make a case against the estate agent for not acting in a client’s best interest. Make no mistake, it is the houseowner’s decision, not the estate agent’s, whether or not to consider an alternative offer. Idioms such as ‘a bird in the hand’ and ‘falling between two stools’ are usually sufficient for a houseowner to decline, but the difference in price can be persuasive.
Even if the full asking price has been offered and accepted, this does not prevent someone pitching a higher offer. Even if the houseowner has agreed to withdraw the property from the market, it is a moral obligation and not a condition of sale unless committed to writing. And that, by a rather convoluted route, raises this article’s redoubtable point of concern. A concern for both buyers and sellers with uncertainty and financial consequences at stake, besides emotional anguish.
An increasing number of house sales in Guernsey do not have conditions of sale signed until the completion day, when all parties attend conveyancing court and hand over keys. This also relieves the purchasers from paying a deposit beforehand, which often requires bank funding.
Conditions of sale set out the terms of the agreement. In standard form, the purchaser is allowed time to attend to matters such as survey and finance, in the knowledge that the vendor will not have a change of mind or entertain alternative offers in the meantime. Likewise, the vendor is reassured by the good intent of the purchaser lodging a 5% or 10% deposit. It becomes a legally binding contract and, without exaggeration, the joy and relief of both parties upon signing conditions of sale are palpable.
Any property sale can be completed through conveyancing court without conditions of sale, signed or otherwise, but advocates acting for purchasers still require them, and want them signed even on the day, because conditions of sale contain covenants and assurances from the vendors that benefit the purchasers.
This disengagement is unsettling for people selling who, without wishing to tempt fate, need to make their own arrangements and start packing up house. But have they got a deal, or haven’t they? It also exposes them to the plight of gazundering, when a purchaser tries to reduce the agreed price at the 11th hour.
But buyers beware, Guernsey’s recent increase in market activity has incited gazumping and, if the houseowner accepts a higher offer, the aggrieved buyers miss out on their chosen home and might still incur survey and legal fees on a house they can no longer buy.
So why the delay, if signing conditions of sale and lodging a deposit well in advance has such significant advantages?
Progressive and additional measures now require advocates, surveyors and mortgage lenders to have their ducks not only in a row but basted and ready for the oven. Each faction relies upon the other two in a plate-spinning routine, with the estate agent as the willing assistant and the vendors and purchasers watching on keenly from the stalls. Tension rises as some plates wobble until finally the sequence concludes and the conveyance is completed. Except there was no time for an interval to sign conditions of sale.
This is not being derisive of the complex and time-consuming work involved pre-conveyance, sometimes involving a neighbour’s participation on questions of boundaries or wayleaves, and regularly exacerbated by a house sale forming part of a chain, when just one fallen plate can topple all the plates in a long chain of sales.
Regularly bypassed in conditions of sale is an interim operative date that allows time for plate spinning, after which the conditions of sale become unconditional and both parties know they have a deal.
The current high activity in Guernsey’s housing market needs resolute commitment to operative dates, for the good of vendors and purchasers alike, and dispelling any chance of gazumping or gazundering once conditions of sale are signed. This will require more time for spinning the plates, possibly six to eight weeks, which means extending the time between an offer being accepted and completing the conveyance to three or possibly four months, but in the safe knowledge of conditions of sale having been signed.
House sales in a chain need to have the same operative dates, when the pre-signed conditions of sale are held in escrow by the advocate or estate agent and simultaneously released, or withdrawn, depending on each and every sale becoming condition-free.
This will not prevent the earlier completion of family transactions, or the sale of fields or suchlike, or indeed delay anyone insisting upon a quick completion date, if they decide to run the risks associated with signing conditions of sale on the day.
All things being equal, I know which I would choose.