The booming residential property market in London and the South East is seeing the unwelcome return of pressure practices, says property law firm Boodle Hatfield.
Sellers looking for the highest price combined with buyers trying to secure the perfect property has led to the return of high pressure tactics, such as the mass viewing, sealed best bids and gazumping, where a seller accepts a higher bid after already having accepted another.
Saskia Arthur, a partner in Boodle Hatfield’s Residential Property team said: “Fierce competition that was until recently confined to prime central London locations has now spread throughout the City and the South East and with it the nasty practices not seen for a number of years.”
Saturday morning open days instil a sense of panic and intense competition, as potential buyers are rushed round the most popular properties along with numerous other interested parties.
Saskia says: “I’ve heard of one prospective buyer being shown around a two-bedroom house in south-westLondon, ripe for re-development, with 30 other interested parties in the space of just 20 minutes.”
“There is then an expectation that initial offers must be submitted by Monday morning at the latest, with final offers being requested just a few days later.”
Gazumping is also on the increase and there is very little that can be done to prevent it.
“Whilst agents may push exclusivity agreements with large non-refundable deposits, these do not legally bind the parties to actually exchange contracts,” says Saskia. “Once the exclusivity period closes the seller can still walk away, but should have to return the deposit. The cost of litigation also prohibits most people making a claim.”
A buyer can, however, take practical steps when it comes to sealed bids. Saskia offers this advice:
•Find out from the agent exactly what is required by the seller; •Include with your bid a covering letter that tells the seller why this property is right for you – it is not always the highest bid that wins;
•If possible, stress flexibility in timing for completion – whilst many want a quick exchange, sellers may want to delay completion to coincide with school terms or work commitments;
•Deliver your bid to the agents just before the allotted time – not too early and certainly not late;
•Have any mortgage requirements in place and advice the seller of those arrangements; and •Have surveyors, solicitors and any other advisers all lined up and ready to move.
Saskia concludes: “London and much of the South East is a sellers market. Buyers need to understand the market, and some of the more unpleasant tactics that have once again returned, to give themselves the best possible chance of securing the home they want.”
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