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Fall-throughs: Why agents should tell vendors not to go elsewhere

fIXFLO news story

Vendors whose sales have fallen through lessen their chances of selling again if they switch agents.

New research into fall-throughs last year shows that 44% went on to sell through the same agent.

By contrast, the chances of selling through a different agent were less at 38%.

Those fall-throughs that were listed with a second agent had a 9% chance of falling through again.

However, the latest research from View My Chain puts the fall-through rate at far less than has been previously thought – just 12.5%, as opposed to 20%-30%.

Which? for example last year suggested one-third of sales fell through, while Quick Move put the figure at 20% for the first three months of last year, while the Department for Business, Innovation and Skills – which says it will be asking for evidence about improving the house buying and selling process –estimates that £270m is lost each year by potential home buyers on failed transactions.

The new research bases its percentage of fall-throughs on an average of 1.2m properties sold each year in the last two years.

According to View My Chain, a platform allowing agents, solicitors, buyers and sellers to track progression, there were 109,000 fall-throughs last year, compared with 149,705 in 2015.

Around 20% of these properties were eventually withdrawn from the market, failing to sell altogether, translating to 40,205 in 2015 and 23,088 last year.

The data suggests that the lower number of fall-throughs last year was largely due to the Stamp Duty 3% surcharge which was introduced in April. This meant that there were high numbers of motivated buyers in the first quarter of 2016.

The report estimates that, based on the loss of a 1% commission fee and the number of listings that fell through and were then sold by another agent, fall-throughs are costing agents some £33,129,584 each year.

The cost for consumers is put at £316,129,583, although the research says this requires further investigation.

The research also details the time it takes to progress a sale from SSTC to completion, with large regional variations in the times it takes to get searches back. It says that most fall-throughs happen before searches are even ordered or mortgages applied for up and down the chain – with the typical chain being three properties.

Sohail Rashid, of View My Chain, said: “The data clearly shows the biggest delays are in the early stages, where the consumer is required to instruct a legal representative to issue contracts and request searches, and apply for their mortgage. Until every party in the chain has progressed to this stage and all searches have been ordered, the data shows that the chain is three times more likely to fall through.”

Rashid said that the new data on existing agents having more success than subsequent agents in selling fall-throughs, was of great value to businesses attempting to retain vendors.

View My Chain, founded by Ian Lancaster and Rashid in 2015, is a platform that allows agents, buyers and sellers to view key milestones in the transaction, such as searches being ordered and mortgages applied for.

Rashid previously founded Property Network, in an attempt to target Facebook users.

The business has since been sold and is now a free listing platform for agents.

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Source:: Fall-throughs: Why agents should tell vendors not to go elsewhere