4 ms·

Here (England) people like to complain about the system, mostly because either party can walk away for free until the actual contracts are exchanged, but overal

Here (England) people like to complain about the system, mostly because either party can walk away for free until the actual contracts are exchanged, but overall it is simple and cheap. Technically, estate agents are not required, lawyers are not required, etc. Seller and/or buyer could do everything themselves if they wished (unwise but they could) as long as no mortgage is involved (the lenders are the ones requiring that the buyer uses a lawyer). Lawyers are cheap, estate agents' commissions (paid in full by seller since agent works for them) are low, maybe 3%+VAT max. Personally I prefer this than the rip off that is going on in many other countries where both sides are taken to the cleaners.

scrlk 3y ago
The chain system is absolutely ludicrous, I wouldn't call it "simple and cheap". IMO the whole system needs reform, I would wager it would go some way in fixing the housing crisis in the country.
- mytailorisrich 3y ago
  Well, it is simple and cheap. "Chains" are not 'the system' they are a fact of life. Many people sell one property to buy their next one and need the money from the sale to finance the purchase (and also don't want to end up on the street) so they want contracts on both sides to be entered into at the same time. It adds a level of complication but no additional costs. This is an issue that exists everywhere though solutions perhaps vary a bit. Usually it is a combination of relay loans (not free) and conditional contracts (tricky and pretty much the same result). If you are a first time buyer it does not matter much apart from adding delays. I don't see how reforming (how?) a system that is simple and cheap would help solve the "housing crisis". If there is something that needs reforming, well abolishing really, it is leaseholds.
  - hotnfresh 3y ago
    > This is an issue that exists everywhere though solutions perhaps vary a bit. Usually it is a combination of relay loans (not free) and conditional contracts (tricky and pretty much the same result). We use both in the US. I’m assuming a “relay loan” is akin to what I’ve seen as a “bridge loan” here—a temporary loan to cover a down payment while waiting for your current house to sell. More often, we use conditional contracts. This would be classified as a “contingency”—we’ll buy this house on date X for price Y if the money from the sale of our house is in the bank by date X, that kind of thing. Needing one of these tends to make an offer less attractive, though.
  - ta1243 3y ago
    Any new home for the last decade, including "freehold" ones, comes with financial obligations to pay for public areas. Older homes have that as council tax, but new homes have a privatised council tax in addition. It's known as "fleecehold" due to its similarity to leasehold.
    - gpderetta 3y ago
      The difference is that there are actually some modicum of protection and rights for leaseholder, not so much for "fleeceholders".
  - scrlk 3y ago
    Apparently 1/3 of property chains fall apart before completion - that's a lot of wasted money on searches and solicitors. > I don't see how reforming (how?) a system that is simple and cheap would help solve the "housing crisis". Is there effective utilisation of the existing housing stock? Encourage people to move to ensure that their home meets their current needs. E.g. retired couple, children have left, so their current house is oversized. Making property transactions less stressful for people would assist with this. I'm certain that there are people out there who would be open to moving, but CBA with dealing with the stress of being stuck in a property chain. How? Just look up north to Scotland. Not a perfect system (e.g. "offers over"), but ahead of what England has to deal with when it comes to transactions.
    - mytailorisrich 3y ago
      > Encourage people to move to ensure that their home meets their current needs. E.g. retired couple, children have left, so their current house is oversized. I'd wager that no-one has been put off moving house because of the legal procedure or over-stressed about it. Now, the actual moving day is stressful but that's the way it is...
  - PaulDavisThe1st 3y ago
    As a Brit-by-birth but Usonian-by-choice, I'm always amazed whenever I go to visit family in the UK how much "chains" feature in real estate listings there. You almost never see anyone refer to this in US sales listings, other than perhaps a vague alusion to "motivated seller". Wandering around RE agent shops in Bath, it seems that 30-50% of every window-displayed listing mentions something about the chain status. Odd. Interesting. Both.
    - mytailorisrich 3y ago
      They tend to highlight if there is no chain because that's a selling point. Likewise if you're looking to buy and have no chain (e.g. you're renting) it's worth mentioning it to the agent as that also makes you a 'good' buyer. Also perhaps if the chain is in place apart from finding a buyer for the advertised property (i.e. seller has already found their next property, etc) because, indeed, that means that the seller wants to get on with it ASAP.
ta1243 3y ago
Here in England, last time I sold I paid £1k flat fee to my estate agent, and about £1200 to solicitor to handle the sale and purchase (including things like various searches, handling the mortgages, etc), and another £500 for an independent survey. That's less than half a percent. I hear the Scottish system has benefits -- rather than the buying doing the searches, survey etc, the seller does. That means it's far faster to make the offer -- rather than "I'll pay £x, but first I need to invest £hunderds in due diligence", it's "I've seen all the stuff I would have to pay for, so due diligence is over, lets move.
gpderetta 3y ago
Well, there is plenty of insanity still: - buyer can't walk away after exchange, but your mortgage provider can with impunity, screwing you up - There is no CGT if you sell your first home, but tax duty (paid by the buyer) can be significant - buyer (well, buyer solicitor) is responsible for fetching all the documents. This can be a significant time cost. - let's not talk about the headaches from selling or buying a leasehold. But yes I agree that solicitor and agent costs are relatively cheap.

scrlk 3y ago

The chain system is absolutely ludicrous, I wouldn't call it "simple and cheap". IMO the whole system needs reform, I would wager it would go some way in fixing the housing crisis in the country.

mytailorisrich 3y ago
Well, it is simple and cheap. "Chains" are not 'the system' they are a fact of life. Many people sell one property to buy their next one and need the money from the sale to finance the purchase (and also don't want to end up on the street) so they want contracts on both sides to be entered into at the same time. It adds a level of complication but no additional costs. This is an issue that exists everywhere though solutions perhaps vary a bit. Usually it is a combination of relay loans (not free) and conditional contracts (tricky and pretty much the same result). If you are a first time buyer it does not matter much apart from adding delays. I don't see how reforming (how?) a system that is simple and cheap would help solve the "housing crisis". If there is something that needs reforming, well abolishing really, it is leaseholds.
- hotnfresh 3y ago
  > This is an issue that exists everywhere though solutions perhaps vary a bit. Usually it is a combination of relay loans (not free) and conditional contracts (tricky and pretty much the same result). We use both in the US. I’m assuming a “relay loan” is akin to what I’ve seen as a “bridge loan” here—a temporary loan to cover a down payment while waiting for your current house to sell. More often, we use conditional contracts. This would be classified as a “contingency”—we’ll buy this house on date X for price Y if the money from the sale of our house is in the bank by date X, that kind of thing. Needing one of these tends to make an offer less attractive, though.
- ta1243 3y ago
  Any new home for the last decade, including "freehold" ones, comes with financial obligations to pay for public areas. Older homes have that as council tax, but new homes have a privatised council tax in addition. It's known as "fleecehold" due to its similarity to leasehold.
  - gpderetta 3y ago
    The difference is that there are actually some modicum of protection and rights for leaseholder, not so much for "fleeceholders".
- scrlk 3y ago
  Apparently 1/3 of property chains fall apart before completion - that's a lot of wasted money on searches and solicitors. > I don't see how reforming (how?) a system that is simple and cheap would help solve the "housing crisis". Is there effective utilisation of the existing housing stock? Encourage people to move to ensure that their home meets their current needs. E.g. retired couple, children have left, so their current house is oversized. Making property transactions less stressful for people would assist with this. I'm certain that there are people out there who would be open to moving, but CBA with dealing with the stress of being stuck in a property chain. How? Just look up north to Scotland. Not a perfect system (e.g. "offers over"), but ahead of what England has to deal with when it comes to transactions.
  - mytailorisrich 3y ago
    > Encourage people to move to ensure that their home meets their current needs. E.g. retired couple, children have left, so their current house is oversized. I'd wager that no-one has been put off moving house because of the legal procedure or over-stressed about it. Now, the actual moving day is stressful but that's the way it is...
- PaulDavisThe1st 3y ago
  As a Brit-by-birth but Usonian-by-choice, I'm always amazed whenever I go to visit family in the UK how much "chains" feature in real estate listings there. You almost never see anyone refer to this in US sales listings, other than perhaps a vague alusion to "motivated seller". Wandering around RE agent shops in Bath, it seems that 30-50% of every window-displayed listing mentions something about the chain status. Odd. Interesting. Both.
  - mytailorisrich 3y ago
    They tend to highlight if there is no chain because that's a selling point. Likewise if you're looking to buy and have no chain (e.g. you're renting) it's worth mentioning it to the agent as that also makes you a 'good' buyer. Also perhaps if the chain is in place apart from finding a buyer for the advertised property (i.e. seller has already found their next property, etc) because, indeed, that means that the seller wants to get on with it ASAP.

ta1243 3y ago

Here in England, last time I sold I paid £1k flat fee to my estate agent, and about £1200 to solicitor to handle the sale and purchase (including things like various searches, handling the mortgages, etc), and another £500 for an independent survey. That's less than half a percent. I hear the Scottish system has benefits -- rather than the buying doing the searches, survey etc, the seller does. That means it's far faster to make the offer -- rather than "I'll pay £x, but first I need to invest £hunderds in due diligence", it's "I've seen all the stuff I would have to pay for, so due diligence is over, lets move.

gpderetta 3y ago

Well, there is plenty of insanity still: - buyer can't walk away after exchange, but your mortgage provider can with impunity, screwing you up - There is no CGT if you sell your first home, but tax duty (paid by the buyer) can be significant - buyer (well, buyer solicitor) is responsible for fetching all the documents. This can be a significant time cost. - let's not talk about the headaches from selling or buying a leasehold. But yes I agree that solicitor and agent costs are relatively cheap.