Every time a sale falls through it is estimated that the average cost to an estate agency business is more than £4,000, new research suggests.
Based on the average house price of £284,100, combined with a typical agent fee of 1.42%, Moverly estimates that the average estate agent earned £4,034 per transaction last year.
Given that an estimated 31% of transactions are thought to fall through before finally making it to the finish line last year, Moverly says this equates to 315,652 sales to have fallen through during 2022.
Consequently, fall throughs are estimated to have cost UK estate agents collectively in the region of £1.27bn in 2022.
It is not just the agents that miss out on earnings from the transaction.
Conveyancers typically make £2,239 per transaction when representing the buyer, or £1,069 for the seller. As a result, Moverly estimates that conveyancers working on behalf of the nation’s homebuyers could have lost out to the tune of £706.7m due to fall throughs in 2022, while those acting for sellers are thought to have lost £533m.
Of course, in some cases agents and conveyancers still end up earning money from the client after a transaction fails – it’s just an offer that needs to be resubmitted and more work needs to be done to get it over the line.
Moverly co-founder, Ed Molyneux, commented: “When a home purchase falls through it isn’t just stressful for all involved, it’s a costly process that takes billions out of the pockets of agents and conveyancers.
“Even when property purchases go smoothly it still tends to be a long drawn out process, as the home needs to be listed, surveys need to be conducted and in many cases mortgage finance needs to be secured before buyers and sellers sign on the dotted line. This provides ample time in which circumstances can change, or both buyer or seller can have a change of heart, allowing frustrations to build across the chain.
“While estate agents can lower the chances of fall-throughs by being professional and efficient throughout, a proactive approach in securing the information required for a transaction upfront can also help minimise the chances of a fall through.”
