Are booking agreements the future of the agency? Those…
You recently celebrated a milestone in reservation agreements – can you tell us a little more about that?
We are delighted to reach the milestone of 100 reservation agreements in force. The UK property system is broken, with almost a third of sales failing. In our view, more agents across the country should offer, if not enforce, reservation agreements to give all parties involved in the transaction greater peace of mind and security.
What are the main benefits of an agent using booking agreements? To those who are still skeptical, what would you say?
There is currently nothing in the English system that suggests that you cannot opt out of a transaction free of charge. This can cause unnecessary upheaval and stress to all parties involved, so by committing financially to each other helps prevent this from happening.
Something I really like about Gazeal is the “Buyer Information Packs” that are provided. At the time a property is put on the market with us, checks are carried out for title deeds and cadastral documents. Customers are then also asked to complete TA forms such as TA6 and TA10 (TA7 if the property is leased).
These forms are part of the ‘Buyer Information Pack’. At the time of the visit, buyers are informed of all this information so that they are better informed at the time of the offer.
Can you give us a quick overview of Knight Edmonds? Your size, the area you operate in, how long you’ve been going, etc.
We are a fairly new company. Alex and I started the business in early March 2020. Three weeks later we went into lockdown and wondered what we had been doing, but we’re getting better and better and now have 10 employees at Knight Edmonds.
We are currently operating in serviced offices, where we have already found ourselves too small for every room. We are currently in our fourth office. We recently got a local on the main street of Maidstone which is arguably the most important position in the whole town, which really gets us excited.
Do you think that the use of reservation agreements will become much more widespread in the coming years?
They should certainly be generalized. It is essential to ensure the safety of both sellers and buyers during a transaction. We have a meeting scheduled in a few weeks with Gazeal and the government to discuss whether reservation agreements should be enshrined in law and become a standard part of buying and selling homes.
And now Chris Ellis, owner of Harrisons Homes in Sittingbourne, Kent.
You just made 100 booking agreements – can you tell us more?
For us as a business it all started with the first lockdown and we were looking for ways to improve our service as a business and how we could improve our service.
When we decided to offer this service, we didn’t really have any steps to take other than providing more security for our sellers and buyers. Although, as we got closer to 100, then I started to realize how successful it was to have reached this milestone in a relatively short period of time.
We had unfortunately come up with something that was not normal in our industry, but we knew our salespeople would have a committed buyer from the start, and they were financially committed. During this time, buyers knew our sellers were fully attached to them as the buyer and would not have fun looking at them.
I’m surprised at how many sellers / buyers come to this as they have been somehow disappointed due to the points highlighted below.
Why do you think reservation agreements are good for the industry?
From a personal perspective our industry has a bad reputation and yes that’s understandable on one side of the equation as there have been some bad agents who are only interested in lining their pockets.
However, the law as it stands now allows for bad practice within the industry and it easily allows people to change their minds or allow gazumping and gazundering.
I have been saying this since I joined the agency 18 years ago and there has to be a change in the housing process. There needs to be more transparency, as well as security for both the buyer and the seller. In my experience we have buyers who bid on properties and then walk out a week or so later because something better has happened that they prefer, or they go through the process several weeks / months and then when it is close to the exchange of contracts, they offer again or withdraw altogether.
It is not fair and we have the lives of people to contend with. It’s an emotional roller coaster. In the same case, we have sellers who pull out because they are still attached to the property or because it is not fair. However, again, it’s not fair to the buyer as this could be their dream home and it got pulled at the same hurdle.
I can sympathize somewhat with some of the reasons, however, there has to be a commitment as it is not fair to all parties involved. It is unfortunately a stressful / emotional experience most of the time, and there has to be a change to alleviate the issues mentioned and make the process more enjoyable.
Can you tell us a little more about your collaboration with Gazeal?
I had known Bryan at Gazeal before on a personal level and we had shared the same views on the accommodation process so when he came to me and told me I had something that you would be very interested in I knew that it was for us.
They also do our AML checks with sellers and buyers, which makes it simple and easy and under one roof, rather than multiple companies, which helps.
What also helps and is part of the deal is including the necessary forms provided by Gazeal (Property Information Form TA6 and TA10 Appliances and Accessories). We ask our sellers to fill them out before going to the market so that my sales team is more knowledgeable about the property when showing potential visitors around the property.
It also means being more transparent with buyers at the viewing and offer stage, so that they are fully informed before making an offer.
We have a great relationship with our Account Manager Louis and our Relationship Manager Lera, who I believe have become extended members of our team.
Would you encourage other agents to use reservation agreements to improve the industry as a whole and reduce the risk of failure?
100%! We have a 4/5% drop rate that we’re very proud of, whereas the national average is around 30%, so that has to be a contributing factor to how we make deals. Majority of the falls we had were NOT on a booking agreement.
It has helped us a lot with knowing who we recommend as a buyer to our sellers as we have found ourselves in the same situation time and time again this year where we have multiple offers on a property. However, when we asked them to commit financially to the transaction and make a reservation agreement, not all parties want to do it, so from our perspective it begs the question “are they serious?” “
As I mentioned above I strongly believe this is a big step forward in improving the buying / selling process and I think it should be something that is fully introduced in the area.
* Bryan Mansell is co-founder of Gazeal