Not only is the government considering binding booking agreements, but it is also considering measures that require sellers to provide more advance information to buyers before a property is marketed. The information would be available in a document or portal, as would home Information Packs, which were suspended from use in 2010. These potential reforms are being considered again, in the hope of providing greater security to parties involved in real estate transactions and reducing the time it takes to close a sale or purchase. The government is working with industry on the development of a short standardized booking contract that can be used in any real estate transaction. Under this agreement, if a party withdraws from a transaction, it will have a financial penalty and lose its booking account. Certain circumstances would be exempt from all penalties, including family bereavement, job losses and unforeseen problems with the property. The aim is to lock the two parties into an early agreement through a financial contribution aimed at avoiding the failure of sales and purchases and, therefore, reducing unnecessary financial losses and strengthening confidence in the purchase or sale of a property. The reason behind the path is to remove the ability to withdraw without any consequences. As Housing Minister Heather Wheeler said at the council for Licensed Conveyancers` annual meeting earlier this year: “We want to increase people`s engagement by making sure they get a little bit of skin in the game… there is no reason why this cannot become standard practice. I think the appetite is there. The government will “conduct a field trial before the end of the year.” So the government took over with a solution. The reservation test.
How will the booking agreement work? The initial recommendation of the HBSG working group is that the agreement be subject to the information available at the time of acceptance of the offer and the circumstances of the buyer and seller. There will be an online information questionnaire for sellers in advance. Both parties are expected to pay a bond of commitment that they can lose if they violate the terms of the agreement. All deposit funds paid are protected by an arbitration procedure. At a time when consumers do not have a lot of free money, and certainly when buying a property after having already paid for investigation fees and research fees, this is only an additional fee to find and could discourage the purchase. The majority of transactions do not fail because someone changes their mind, which is usually due to the fact that someone in the chain is not able to get mortgages, negative surveys or something discovered during the transmission process, which the booking fee does not provide the answer. And when a corporate agency participates in the study, different sectors may have to test different types of booking agreements – and some branches will continue an existing purchasing process without a reservation agreement. The government has announced the timing of the highly coveted review of the housing market reservation agreements, which are scheduled to take place between January and March next year. At an MHCLG conference, an MHCLG representative said the trial would be conducted in two regions of the country that have not yet been selected; The carriers and agents that will be involved have not yet been selected. The scope and details of the procedure are always reviewed by a company mandated by the department.
As a result, Prior said, the government has worked with industry to develop what it called a “short standardized reservation agreement that can be used in any transaction.” This is why 50% of buyers and 70% of sellers said they were ready to make a legal commitment after accepting their offer.