As a successful estate agent, you will naturally find abortive sales both frustrating and costly, but unfortunately they are part and parcel of the property market.
Buyers and sellers pull out for a range of issues: some are avoidable and others not.
Recent data recorded by my firm shows 20% of abortive sales were as a result of financial issues, the majority of which being buyers not able to obtain a mortgage.
From our own data, this figure is at its highest point to date in 2015 and significantly higher than the last few months, as you can see from the graph.
Across the year so far, financial/mortgage issues accounted for 12% of abortive sales and was the third highest reason in our data.
The top reason for abortive sales recorded in 2015 to date, accounting for 30% of the total, is the withdrawal of an offer by the buyer.
Reasons varied, but the main ones cited were:
- issues arising through the legal process they were unaware of when putting in the offer causing delays
- personal circumstances
- simply changed their minds.
In a recent article, Danny Luke at Quick Move commented that as the property market becomes more competitive, buyers are coming to the market better prepared in order to make themselves more attractive to vendors when competing for property.
With continued market buoyancy and predicted interest rate rises, buyers are keen to secure properties quickly before they’re priced out of the market, and coming to the table prepared means they are able to snap properties up quickly.
This being the case, abortive sales as a result of buyers withdrawing could decline if the post-sale process is managed well.
The second highest reason for abortive sales year to date is vendors withdrawing.
However, this accounts for only 14% of cancellations and is much less prevalent than buyers withdrawing.
The top reasons cited in this category were that the buyers were taking too long, and personal circumstances changing.
The conclusion from this area of data is similar to that of the buyers withdrawing. If the post-sale process is managed well, some of these abortive sales can be avoided.
However, as with all the categories, the nature of the impact of property sales on personal lives means that there will always be unavoidable situations for people in the process of buying and selling that cause them to reconsider.
The other main reasons for cancellations in our data for the year to date have been chains falling through (11%) and survey issues (11%).
So, as the property market goes into what is normally a quieter few months, the question is, what can be done to reduce abortive sales and ensure your business remains profitable in challenging times?
Qualify your buyers. Make sure you check their financial position.
With 20% of abortive sales being caused by this in October, there are definite benefits to ensuring upfront that the buyer can get the mortgage they need or have the funds in place for the purchase.
Ensure your post-sale service is proactive. Keeping the momentum going and identifying any potential pitfalls early is extremely important to avoid buyers and sellers getting frustrated and pulling out.
Manage buyers’ and sellers’ expectations. Ensure you don’t give unrealistic timescales for exchange and completion to either party.
No one can predict what may come up from the legal side, even with cash purchases, so make sure you manage expectations.
Keep a check on the chains. Understanding where the chain sales are in the process and identifying any gaps could help manage the expectations of buyers and sellers for the timescale of the transaction.
Get talking. Ensuring buyers and seller are kept informed throughout and instructing their legal representatives regularly can help expedite the process.
Some abortive sales are unavoidable, but by putting systems in place to comprehensively qualify your buyers upfront, and ensuring your post-sale service keeps the momentum going, and the buyers and sellers are on board, this gets you to that all important point of exchange, thus you can help minimise the risk of abortive sales and make your business more successful as a result.
Debra Frampton is managing director of UK Sales Progressors
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