Gazeal, the new service aimed at preventing fall-throughs, has already signed up estate agents just days after launch.
Founder Duncan Samuel told Eye: “Although we are concentrating on business-to-business marketing at the moment, we have also been approached by members of the public wanting to know more.
“Typically, they tell us they have been gazumped two or three times on a property and are thoroughly fed up, and are keen to stop it happening again.”
The service is free for estate agents to sign up to and is followed by about an hour’s worth of training on the system.
Samuel said: “We have kept this very simple. Our objective is to help estate agents and to work with them.”
Agents are paid a fee of £100 for every successful introduction to Gazeal and Samuel believes that it is agents who will play the greatest role in building customer awareness.
Gazeal works by locking buyer and seller into the deal as soon as it is agreed.
The buyer hands over £250 plus 1% of the agreed sale price. This latter sum is passed to the seller’s solicitor. The seller pays the same sum on completion, when legal fees are settled.
The buyer’s £250 is refundable should it emerge that the property’s title is not “good and marketable” – in other words, the price of the property could be affected.
Samuel said that while problems with titles are commonplace, they are nearly always minor glitches such as an absence of planning permission for a conservatory, which can be sorted out.
“However, something like HS2 coming through the back garden would be far more serious,” he said.
When Eye ran the launch story on Monday, one reader queried how Gazeal would work if an estate agent subsequently received a higher offer which, in law, must be passed on to the vendor.
Samuel said the seller would be unable to accept this: “What we are selling is certainty,” he said. “Gazeal has the same effect as legal exchange.
“Yes, some sellers might be kicking themselves if they were to get a higher offer, and by the same token, buyers might be kicking themselves if it turns out they could have made a lower offer.
“But what the seller has got is a definite buyer, and what the buyer has is a property they’re not going to lose.”
Samuel, a lawyer, said that his first objective is to bed Gazeal in among the initial target audience of first-time buyers, cash purchasers and buyers of new homes – all buyers without chains.
“When we are satisfied that this has been done, we will roll out Gazeal into the rest of the market, where there are chains,” he said.
“I can’t say when this will be but this is a more complicated product. However, it has already been designed.”
Samuel said he accepts that not all agents will want to know about Gazeal. “Some are quite resistant to change,” he said.
Others, however, will embrace it with the benefit of fewer failed transactions.
He said that he will know when Gazeal has succeeded when agents start promoting it on their own websites and adding it to their Rightmove listings.
The site is here
I was approached by a journalist yesterday and was asked to take part in a radio four discussion about Gazeal on bank holiday Monday, You and Yours, 12.15. I said yes, and await details of which studio in Devon I should attend. If you have any questions you want me to try to ask, email: rh@boldgroup.co.uk
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It strikes me that most buyers/sellers would probably want to take advice from their solicitor before entering into this type of deal……Have the legal conveyancers / solicitors bodies commented on their thoughts?
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Where does this figure of 1% come from. I cannot see any reference to it on their web site? Who gets it?
Wilko: please see my comments on the previous article. I am a licensed conveyancer, now fortunately retired.
One further comment I did not elaborate on is the fact that clients will expect their conveyancer to advise on the content of the Gazeal agreement. This will involve additional costs to the client, as it is likely to be quite time consuming, and will add an additional burden of responsibility.
As Rob said the devil is in the detail; we need to see the proposed lock-out agreement. It will of necessity contain the ability to withdraw if the survey or mortgage offer is unsatisfactory: who defines what is acceptable? What if there is damp at the property? How much damp is OK? What if the mortgage offer contains an arrangement fee which the buyer did not know about, etc.
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When you purchase a new build its already common place to put down a deposit from day 1 and I really cannot see the developers buying into this arrangement. As a rule on a new build the title is normally not problematic.
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What percentage of sales fall through and what are the top five reasons?
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I’m afraid I don’t have enough data on fall-throughs to quote five top reasons, Rob… ;o)
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Nowhere near 1/3rd as it says on the site I would consider 10% high but Stephen Hayter will give you a better Idea, he has numbers!
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“first objective is to bed Gazeal in among the initial target audience of first-time buyers, cash purchasers and buyers of new homes – all buyers without chains.”
What b011ocks. Who says that those who purchase new homes are chain-free? The vast majority I’ve dealt with – and that adds up to several thousand over almost four decades of involvement – certainly haven’t been.
Not only that – but what about the vendors selling TO the FTBs and cash buyers?
Chains can have links at both ends, one end – but very seldom an neither.
I would have expected far more understanding from someone who has been involved in conveyancing for more than a decade I can see…
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The description of what money is going where and when with no real idea of what the penalty for withdrawing once the survey (anything) shows up something horrid has me thinking this sounds like a game of thimblerig. Everyone will be delighted that the Agent is copping 20% commission for saying it is a great idea, for agents it is an insurance that pays out on every deal done.
Surely vendors are paying agents to find applicants who can’t be gazumped and securing offers that can’t be improved upon. In 9 years coalface selling I can only remember a single gazump and that was in the mad Miras spring.
I personally think a Gazeal sticker will be regarded as a sign that says ‘caution shifty commission deal for tying up any old deal to not properly qualified applicant.’
Good agents will turn this against Gazeal agent Agents as a means to win instructions.
“Sorry we don’t sell that, our fall through rate is only *** not 33% like a Gazeal agent and because neither party is shelling out £250 you will be better; before we start our offers will be a minimum £250 more than a Gazeal Agents and with no fee from you there’s you £500 better off at least. We are quite happy with our fee structure that rewards only success and isn’t a drip feed for underperformance. If you are thinking of pulling out of a sale please tell me now, the Gazeal agent Agent is welcome to your instruction. My job is to find you the best buyer out there.
I might have got completely the wrong end of the stick but that is how clear all of this actually is. Is the pea under that cup?
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Let’s come back in a year and see how it’s done, my money is on it not working. – Jonnie
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