A new ‘lock-in lite’ style service is being trialled which allows a vendor and buyer to ‘commit’ to a transaction through a monetary deposit.
HonestyBox was soft-launched last month but has been used by Hewitt Adams on the Wirral for the last six.
Hewitt Adams is co-founded by Ben Adams, who started with Countrywide where he became a regional marketing manager before moving on to Dubai for three years.
It was there that he says he came to value how to secure a transaction from the outset.
He says the Dubai system is far less stressful for both sellers and buyers.
Coming back to the UK, he set up Hewitt Adams with business partner Dan Hewitt.
The pair started developing HonestyBox some 18 months ago, believing it could be an instruction winner.
Through HonestyBox, agents offer sellers and buyers the ability to offer either £500 or £1,000 each into the ‘honesty box’.
Both lodge equal amounts and can then choose an ‘absolute’ or a ‘qualified’ lock.
‘Absolute’ is where neither party can withdraw from the agreement without forfeiting their deposit.
Adams said that this is the more popular option with cash buyers or those in chain-free situations.
The ‘qualified’ lock allows the parties to create their own terms and conditions, and outline the instances either party may exit the agreement without penalty.
A qualifying term might be that the property must value up on survey to the agreed purchase price. If it doesn’t, the deal can be renegotiated or the purchaser can withdraw without penalty.
Another qualifying term could specify that where a chain collapses, buyers and sellers can exit without penalty or agree a further time window.
Adams said: “It’s designed more as a gesture of intent and a deterrent for anyone who might have a habit of gazundering or gazumping.
“We recognise it’s not as iron clad as a full reservation agreement or as legally binding as the Gazeal system. But it wasn’t designed to be.
“It was created to strengthen chains, deter gazumping and gazundering, and nurture greater trust as well as confidence in chains.
“As someone who has been a lister, branch valuer and business manager for the last decade, I wanted it to be a tool that offered some extra peace of mind to sellers and buyers.
“We also thought it would be a helpful tool to estate agents and perhaps give them a handy USP over their competition.”
Agents pay £50 a month to use the service.
Adams said that at £600 a year, it only needs to win one instruction or prevent one fall-through to pay for itself.
Over the next three months agents are being invited to trial it free through the website by typing in the code: INVITED.
The Government has expressed its interest in lock-in agreements as part of its proposals to improve the home buying and selling process.