Now is the time to focus on ‘legal kerb appeal’

First impressions are important; that’s why both home buyers and sellers focus on kerb appeal. Decluttering, neutralising space and the smell of baking bread may encourage offers, but these efforts won’t drive exchanges.

To secure a motivated buyer and complete the sale, sellers, now more than ever, need to think beyond the superficial. They must consider how they can gain an edge by improving the property’s “legal kerb appeal”.

This article, considers how agents and solicitors can join forces to help vendors maximise the chances of finding a buyer and exchanging. Many agents will already be carrying out some or all of the suggested procedures as ‘best practice’, but I hope that others will find the guidance particularly helpful.

What is legal kerb appeal?

Simply, legal kerb appeal is the strengths of the property when considered from a legal perspective.

Legal kerb appeal could also involve proactively addressing any potential legal issues before a buyer is found.

But buyers don’t consider the legal perspective…

Buyers are increasingly aware of the legal context of property (even if they don’t think about it in “legal” terms), and may spot the warning signs during a viewing.

A savvy buyer could spot evidence of a neighbour’s right of way, a flying freehold issue or an unofficial roof terrace.

Any such issues can be glossed over, but an agent armed with the facts during a viewing will be more convincing.

Informing a buyer that the property is offered with a legal remedy in place, or with indemnity insurance, will put their mind at ease.

Why legal kerb appeal matters more now

Addressing the property’s “legal kerb appeal” early on, when (or before) the property goes on the market, offers two key benefits.

The first benefit is that the property’s strengths from a legal perspective are identified, and the property can be marketed on the basis of these.
Common examples include existing planning permission for a proposed extension, and rights of access over another property.

The second benefit is that potential legal issues can be identified before a buyer is found, giving solicitors the time to solve them or identify solutions whilst the property is on the market.

It also empowers agents to immediately and confidently address any concerns made by knowledgeable buyers.

After the COVID-19 lockdown ends, buyers will be in a strong position and some could be ‘flaky’.

As transactions restart, demands for surveys, searches and managing agent packs may cause significant delays.

Legal issues that are uncovered later in the conveyancing process will create friction, and could risk the sale falling through or prompt a renegotiation.

Improving legal kerb appeal

How can you identify a property’s strengths in legal terms? What can you do to make the legal aspect of the offering stronger?

These fundamental questions cannot be clearly answered without a solicitor’s input.

Instructing a conveyancing solicitor before a buyer is found is a good strategy regardless of the legal state of the property.

Much of the conveyancing work on the seller’s side can be done preemptively, before accepting an offer.

Encouraging the solicitor to proactively identify the property’s legal weaknesses means the issue won’t be uncovered later, causing delays during the conveyancing process, shaking a buyer’s confidence or gifting the buyer with a ready-made excuse for renegotiation.

What can agents do?

Agents should consider asking a vendor for the details of their solicitor when they first list the property.

If any of your live vendor files don’t have a solicitor yet, contact the vendor and make the case for instructing a solicitor before they find a buyer.

If your office hasn’t heard yet from a seller’s solicitor, call the seller and ask if the forms have been completed and returned.

If they haven’t, adopt a two-pronged approach with the solicitor to chase the client.

Agents should seek to proactively build relationships with the solicitors at this early stage (and vice versa).

Anticipate any issues with the property and ask the solicitor for input.

What can solicitors do?

Solicitors should get the property transaction forms out by email as soon as possible.

The importance of completing and returning these forms without delay should be emphasised to sellers.

Regular chase calls or emails should be made until the forms are returned.

Solicitors should review the files as soon as possible, with a view to identifying potential strengths and weaknesses that could affect the marketability of the property.

Agree with the seller how best to tackle any issues, and give the agent any input that might help them to address buyers’ queries or concerns.

If the property is leasehold, managing agent information should be applied for as early as possible.

Sellers may be reluctant to part with money in advance of finding a buyer.

In response, solicitors should underscore the risks posed by delays in getting management information (particularly considering the predicted backlogs once the market reboots).

Buyers will certainly want to know about ground rent and service charges so these can be provided to the agent once known.

There may be self-evident physical defects to the leasehold property.

Potential buyers will want to know about any planned works and cost implications.

Obtaining the management information upfront will help identify remedial works in the pipeline before a survey picks up the issue and erodes buyer confidence.

Solicitors should also supply the agent with a copy of the lease if they don’t already have one, and aim to get the sale contract pack out quickly after receipt of sales memos.

Working as a team

“No move, no fee” conveyancing means that for sellers particularly, there is no reason not to instruct a solicitor as early as possible.

No move, no fee also means that a conveyancing solicitor’s interests are firmly aligned with those of the agent and the seller.

Both the agent and the solicitor are financially dependent on sales completing. It is therefore in the solicitor’s interest to inform the agent of selling points, and in the agent’s interest to ask.

Communication is often quoted as the most important single factor that can help the conveyancing process complete.

In some ways, however, promoting communication between the parties is the bare minimum. The seller, agent and solicitor should see themselves as a team, all of who are invested in completing the sale.

Going further, each party should attempt to view the transaction from the perspective of their other team-members.

As the coronavirus lockdown eases, many dysfunctional transactions will collapse.

The temptation in these strange times will be to pass on responsibility for the risk of a sale collapsing to other parties in the process, or to fate.

However, by working as a team, agents, sellers and their solicitors can give the sale the best chance to navigate the post-lockdown landscape and to complete without (avoidable) delay.

 

Chris Salmon is a co-founder and Director of Quittance Legal Services.

[Chris is not related to EYE’s M.D., Nick Salmon.]

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7 Comments

  1. Countrybumpkin

    Speak to most sellers solicitor about indemnity on a situation and they tell you to wait and see what the buyer’s solicitor requests. if you break cpr by not declaring a problem it’s because if you declare it, an potential indemnity will become void. Asked the Official TPO speaker at the NAEA conference about this and in his words “arr hadn’t actually thought about that one” . .. How about if you put in your details under declaration that you have a sensitive issue to declare!      

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  2. tim main

    Call it ‘legal kerb appeal’, preparing a property for sale or just good practice, it seems a simple and easy way to spped up the conveyancing process which is far too slow at the moment.  All parties seem to win, but few do this.  Why?

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  3. Rob Hailstone

    “A savvy buyer could spot evidence of a neighbour’s right of way, a flying freehold issue or an unofficial roof terrace.”
    I have acted for thousands of buyers over the years, and “a savvy buyer” is rarer than an open pub in lockdown.
    I have been banging on about Information up Front since the days of H**s.
    When I formed the Bold Legal Group (nearly ten years ago) BOLD was an anacronym of Bundle of Legal Documents.
    Property Lawyers and estate agents now need that bundle of legal documents more than ever before. When lockdown is relaxed, quick exchanges and completions could be lifesavers for businesses with cashflow issues (most, sadly).
    I am now working with hundreds of conveyancing firms in order to produce good quality, helpful, sellers’ packs, as soon as lockdown ends.

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  4. Woodentop

    “Legal kerb appeal” ……That puts video tours out of the question then, as the way it is being used at this time on Covid-19 lock-down!  
     
    “The first benefit is that the property’s strengths from a legal perspective are identified, and the property can be marketed on the basis of these”.  
     
    “Buyers are increasingly aware of the legal context of property (even if they don’t think about it in “legal” terms)”, ……… Only when the wheel comes off, otherwise they are more than happy to ignore till it bites them.

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  5. mark@solicitorswhocare.co.uk

    If there is an existing indemnity policy for a legal issue disclosing its existence to a casual viewer as opposed to a prospective purchaser i.e one whose stc offer has been accepted, would quite likely invalidate the policy

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    1. Countrybumpkin

      That’s what I was trying to say in the first comment. How can you declare an indemnity or potential indemnity is required without rendering it invalid.

      I am afraid as an estate agent I should write that there is a delicate issue. Well buyers are going to naturally (nosily) want to know about this and it could be a neighbour posing as a potential buyer.

       

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      1. tim main

        the line we have taken on the pipreport website is most information can be made avaliable to potential buyers during the marketing phase of the property but clearly there is some, like indemnity policies that can not be.  We take the line that any additional information is beneficial and will help the buyer and speed up the process.  Why not try it.

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