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Ever since they put away the bunting from the street parties celebrating the scrapping of Home Information Packs (HIPs) fifteen years ago, we’ve been told that if buyers could only get the information they needed to buy a property more quickly, fall-throughs would be reduced and deals would transact faster.
It’s difficult to argue against the logic that getting accurate information faster should improve matters. Indeed, if someone stood up at one of those conferences where everyone agrees that “something needs to be done” and said “Having no information is fine, this house buying process takes as long as it takes” they’d be told to go and shout at the ducks in the park. Mind you, if they posted it on LinkedIn, the number of @mentions that comment would attract would get them inducted into the Influencer Hall of Fame, all by itself.
Information up front – myth or reality
For those not actually involved in the rough-and-tumble that is the home selling process, the concept of having better upfront information through Material Information makes complete sense. The problem with the current government whisperings is that the definition is loosely defined at best, so measuring results will be difficult.
It’s not that having more information doesn’t help; experiments have shown that when a seller buys searches on instruction, deals go through quicker and fall-throughs are reduced. Assuming the searches are accurate (it’s easy to miss parts of a property making them worthless) and exchange is less than six months after instruction, these results are encouraging.
The problem is knowing why this happens. It could be due to the sellers being more committed as they have paid money or that buyers’ lawyers are slow at ordering searches, and fall-throughs are caused by the delays this causes. In any event, it’s a shame that searches are not included in the material information discussion –policy advisors are no doubt spooked by the accusation of this being HIPs Part 2- the Return, as they were included in the original Upfront Information concept.
Better informed choice … to walk away
Those arguing for change say that collecting more information up front “will enable buyers to make a more informed choice” but they miss the second half of the sentence; “to pull out of the deal.” Which creates an awkward assumption that buyers fall into two categories; Dumb and Not Dumb – those that will use the data and those that won’t. However, if a property is blighted by being next to the planned runway at Heathrow Airport, making this information available may well put most people off, dullard or otherwise. Unless a buyer happens to be an avid plane spotter, most people would not be excited by the prospect of A380’s taking off over their property.
As agents know, there’s only one solution when faced with such a dilemma – a massive price reduction.
Which goes to the heart of the problem, that the people responsible for providing this information are those paying the bills of agents to sell their property. When the rallying cry goes out to march on Parliament to demand change, it’ll be first time buyers with the banners rather than sellers, storming the barricades at Westminster.
Which is a challenge, because whilst getting more information quicker is sensible, agents need sellers to sign up with them and if there’s any chance these details might give a buyer an excuse earlyin the process to walk away, they’ll avoid anything that puts the deal at risk.
Agents need instructions coming in at the top of the funnel, because without them, there will be no exchanges, no commission and probably no job. Whilst the argument for better qualified sellers is made repeatedly, which was one of the benefits of HIPs, at the time, agents saw them as a barrier to speculative new instructions.
Read them their rights
We’re not suggesting that the recommendations to provide upfront information should be dismissed as just ramblings. Indeed, as experiments have shown, the current process can be accelerated through intelligent re-prioritising of activities such as getting sellers to buy searches.
But it overlooks the fundamental issue.
Sellers are less likely to take the advice of Inspector Morse when giving a caution, that “Anything you say or don’t say may harm your defence” and instead will be more swayed by Ronan Keating’s suggestion that “You say it best, when you say nothing at all”.
Which unfortunately means the supporters of Upfront Information may have to wait before they start baking cakes and putting out the bunting to celebrate this method of improving the home buying process.
Peter Ambrose is the owner of The Partnership and Legalito.
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