What does 'Time Costs Deals' mean when buying a property?

Find out what Time Costs Deals means when you are buying a property. 'What does Time Costs Deals mean?' plus over 150 other property related terms and jargon in plain English

Time Costs Deals

OK, this isn't so much a term as it is a mantra. In How to Really Buy a Property I devote an entire chapter to it ... but why?

The period of time between Sale Agreed and Exchange of Contracts can be weeks or months during which you or the buyer can simply walk away. Neither of you are legally obliged to go through with the deal.

It takes such an age because your solicitor needs to gather together numerous documents from a number of different parties, all of whom can drag their feet be it through overwork, laziness or just general incompetence. Few have any financial motivation to make the deal happen.

Solicitors get paid (except for the ones who offer "No Deal No Fee"), surveyors get paid, managing agents get paid. All regardless of whether or not you get your property. The only party that is financially invested is the estate agent but whether they care or not varies greatly. Some don't - they just accept a certain percentage of deals will fail.

The longer the period of time, the more probable events will happen that will kill your purchase - as someone once said to me "I was going to get back to you but then life happened" which I think is a great way of explaining it.

As a buyer you need the seller to carry on wanting to sell until you exchange contracts at which point they are legally bound to sell. But the seller is just a person like you and things can happen in their lives that will make them change their mind.

They can lose their job and decide they can't afford the place they were thinking of moving to. A Buy to Let investor can get a great tenancy offer and decide to rent the property out instead. A couple can break up and so decide to put the whole sale on ice while they sort themselves out. In the book I list dozens of things that can happen in life which will cause the vendor to stop selling.

Most of the events I list are going to happen to all of us at some point in our lives so its just a simple case of probability. If those events are going to happen then the longer it takes to get to exchange of contracts, the more likely it is one of those events will take place and the deal will "fall through".

So your aim, and that the estate agent, is to minimize the time period through Deal Chasing - chasing up all the parties that need to provide documents and generally being the person who, because their calling every other day, all the parties just want to get rid of by getting your deal through.

In How to Really Buy a Property I'll tell you exactly what you should be doing and when at every step of the way so you can chase your own deal through to a fast completion.

Search Results for 'deals' in
How to Really Buy a Property

"... let and what the text books don't tell you; Ways to get on the property ladder when it looks impossible; How professional buyers and investors work with estate agents to get better deals; Why you should see as many Financial Advisers as possible; What to do before you start viewing so you..."

"... figures are out of sync with reality because in November and December the value of offers agreed are generally falling but the media reports the completions from the autumn when prices were going up. When the spring arrives offers agreed are rising but the media reports the completions from offers agreed in December and suggests prices are moving down. As summer starts they report prices rising even though offers agreed are falling. In short those who write articles based on land registry data are always about two to three months behind the real market where deals are being done...."

"... and this short term comfort zone will have been factored in to the sale price. Compare the mortgage deals offered with those from other brokers and lenders to ensure you really are getting the best deal. In short do not believe for one moment what is presented before you or persuade..."

"... the papers and surfing the net will give you no end of new developments where the builder is offering special deals on selected plots. These may be free flooring, stamp duty covered, or more significantly a 5% or 10% deposit paid. Many buyers avoid these because their dream property is a twee Victorian flat with fireplaces and walls that seep period..."

"... insisted. You suddenly see the right property but in order to move fast use the only quote you have got or rush around and only get a few more quotes. The panic means you miss the best deals on the market and pay hundreds of pounds more than you have to in mortgage payments. Anyone of..."
"... you instantly what the best deal is at that time. Different financial advisers are given different special deals by different lenders at different times. If Bank X is the best deal with one adviser it may be an even better deal with another. Different financial advisers are paid different..."
"... tempting. Summary - The last thing any buyer wants to do is spend time with financial advisers, finding out about their own credit record or poking around the internet for mortgage deals when they could be out looking at potential new homes - much more exciting. But this crucial step..."

"... confidence in you as a serious buyer and pull out of the deal. Remember above everything that swift progress to exchange is crucial (see Chapter 19: Time Costs deals). An efficient solicitor who knows this should work as follows: Receives contract and title deeds (or office copy entries) and..."
"... traditional approach will easily take three to four months from offer to exchange whereas the modern approach can usually keep the timescales to within four weeks! The traditional solicitor will argue that if anything were to go wrong at any stage he has saved you money. If your survey is a problem, for example, at least you will not have paid for local searches or his time to look at the contract. It's a contradiction - the longer a sale drags on, the more likely it is to fall through (see Chapter 19: Time Costs deals) and cost you money..."

"...As such your non-refundable deposit would have to be subject to these and a whole range of other problems. Before you know it your non-refundable deposit is subject to contract and subject to survey and of no security whatsoever to the vendor. Furthermore it will have taken so long to agree the terms of a non-refundable deposit that no work on the actual purchase will get done. This is not a healthy scenario as we will see in Time Costs deals ..."

"... believe should occur. Arching over all of this is the essential concept that the longer it takes to move from Offer Agreed to Exchange of Contracts, the more likely it is that the purchase will fail. To understand this specifically see Chapter 19: Time Costs deals. Once your offer has..."
"... can be quickly and easily resolved. For the most part many of these hurdles simply cause time delays but as ‘Time Costs deals’ (see Chapter 19: Time Costs deals) every extra week is another chance for your property purchase to fall apart...."

Chapter 19: Time Costs Deals
"... 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..."

"... making your offer the vendor is usually keen to make sure you can move quickly but may not have their own documents in order that will make the speed they require actually happen. This does not always mean they do not want the transaction to go through in a short time-scale and in order to keep things moving there are many things you can do to short circuit delays. Doing this is crucial because, as we have seen already in the chapter Time Costs deals, speed is..."
"... deals fail because the buyer waits weeks with no paperwork and, assuming the vendor is not serious, then goes out and offers on something else. If there is good communication between the solicitors or with the agent then at least you know where in the above process they are and that things are actually..."
"... so often there is a forward thinking vendor out there or one who really has been well advised by the Estate Agent. He will understand why time costs deals and does not want things to drag on as much as you don't. So against the advice of almost everyone he will have applied for a local search when, or before, he put the property on the..."
"... the market. This chapter may have sounded a little strange and you might question why should you do all the work? The answer is simply that it will reduce the time-scales of the purchase and so the risk of it all falling through (as covered in the chapter Time Costs deals. Assume the..."

"... more telling figure is how many negotiators they have per property on the market. As an example a large office with fifteen negotiators may have six hundred properties on the market so the ratio is forty properties per negotiator. The smaller competitor may have four staff and one hundred properties giving it a ratio of twenty five properties per negotiator. In this latter case competition between the negotiators fighting to agree deals on limited stock will be more..."

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