Chapter 19: Time Costs Deals
This is an extract from the ebook How to Really Buy a Property.
What's covered in this chapter
- Why you should push your purchase through quickly;
- Why buyers stop buying and sellers stop selling;
- Why chains often fail;
- The true story of how a buyer lost a property by waiting too long;
There should be no real need for all the tricks and short cuts included in these pages but for one overriding fact that any good estate agent will tell you, "Time costs deals". Removing all the pitfalls of legalities and survey there are factors far outside the actual transaction that will affect the chances of you getting that dream property. They are the things that happen to us all at some point in our life. Events that make us take stock and change the bigger plans we have, such as moving house.
The longer the time period between offer and exchange of contracts, the more likely it is that the deal will fall through, often for no good reason.
Here are just a few events that can stop either the buyer or the vendor proceeding.
|What makes the buyer stop buying||What makes the seller stop selling|
|House Prices Falling||House Prices Rising|
|Loosing their buyer||Loosing the Property they want to buy|
|Any part of the chain below collapses||Any part of the chain above collapses|
|Another buyer makes an offer|
|Fire or flood at the property|
|Splitting up with a partner|
|Meeting a new partner|
|Family crises / illness|
|Job change - promotion/demotion|
|Job move (geographic)|
If you consider this statistically any one of these events has a probability of happening in any one year. For the purposes of proving the point we could say there is a 2% chance of any of the above happening in a year. That means there is a 56% chance the transaction will fail.
If you let your purchase drag on for 6 months that's a 28% chance you will loose your solicitors fee, survey fee, hours of time and quite possibly a few thousand pounds more if the market rises. All this before you have even looked at a survey or contract with all the potential those documents have to ruin the deal!
If you are in a chain involving say four properties, the chances of some disaster befalling the transaction over six months is more than 100%! Don't let it happen.
David was another buyer who had come to see the flat but a month later he had opted for a similar property in a nearby garden square.
Sonya and Mark instructed a solicitor who was not only painfully slow, but also painfully thorough to the extent that the sale dragged on for ten weeks. Their solicitor added new enquiries each week including a request that the freeholder should have all the windows in the building assessed, and get quotes for repainting and repairs, before they would exchange.
David, in the meantime, was close to exchange on his purchase when the vendor pulled out after loosing his job. David called the agent to talk about new properties he could buy and asked after Seymour Street. He was shocked to find that after nearly three months, and in the middle of a busy Spring market, it had not exchanged and immediately offered to pay the asking price.
£30,000 extra was too good to refuse and Sonya and Mark lost the property. The few hundred pounds they may have had to pay sometime in the future to get the windows repainted was nothing compared to the £20,000 more they ended up paying later in the year for a comparable property.