Agents are invited to take part in trials to see if reservation agreements work.
The appeal has gone out from the Home Buying and Selling Group, which has drawn up an agreement and proposed it to the Government.
The initial recommendation from the HBSG working group is that the agreement will be conditional upon the information available at the point of acceptance of offer and the buyer’s and seller’s circumstances.
Both parties will be expected to pay a commitment deposit which they may lose if they breach the terms of the agreement. Any deposit monies paid will be protected by an arbitration process.
However, while the Government has expressed interest in such agreements in the interests of speeding up and securing transactions, both the industry and consumers appear to be split on whether reservation agreements will be successful.
They are already successfully used with existing homes sales and purchases by some agents and also in the new homes industry. Those that use them believe they improve the process and that they do save consumers time and money.
Two companies such as Gazeal and Honesty Box are providing upfront legal packs which include a legally binding agreement which means buyers can’t ‘walk away’, nor can purchasers ‘gazunder’ the buyer later in the home buying and selling process.
There are still questions to be answered as to whether the agreements can work. For example, should they be voluntary or will they need to be compulsory? Some worry it may prevent sellers from putting properties on the market, while others feel it could add more complexity to the process.
If you are interested in participating in a future pilot or would like more information about the reservation agreement please contact the working group chair, Beth Rudolf by email on email@example.com