A new service has launched aiming to tie sellers and buyers into the deal once a sale has been agreed.
A third party company, Property Pledge, holds a signed agreement together with a refundable deposit of £1,000 until the transaction completes or falls through.
The money is held in Escrow and gives the buyer ten weeks’ exclusivity.
If the sale goes through, the buyer gets their money back and pays nothing in costs.
If the buyer fails to proceed, £199 is deducted from the deposit, which is transferred to the seller.
Buyers cannot reduce their offer during the ten-week period without forfeiting their deposit.
There can be a two-week extension if needed for chain reasons.
Property Pledge has been founded by Nick Richards, a former estate agent for nearly 15 years. He worked with independent agents in Dorset until this year.
He says he devised his scheme after seeing fall-throughs and wasted costs for his clients and purchasers, and couldn’t see why a product could not be created similar to those available when buying an expensive boat or car.
The first product to be released is the ‘single agreement’, described above, where only the buyer lodges a deposit.
However, a dual agreement will be launched in January allowing both buyer and seller to lodge deposits.
Richards said: “There is very little trust in the current house buying process, but our system offers protection against gazumping and gazundering, and generally removes time wasters.
“In addition a pledge agreement can also strengthen a buyer’s offers if a seller has multiple offers to consider.”