House Buyer's Blog
House Buying
Buying and selling property can be very stressful. It is up there with divorce, bereavement and childbirth. It should be fun and exciting though.
We will take a look at the possible pitfalls, the whys and wherefores.
Let's get going -
Rules of the Game
The Estate Agent is working for the seller (Vendor) and NOT the buyer
It doesn't matter how friendly they are towards you, they only get paid for SELLING the property.
Caveat Emptor [Let the buyer beware!]
Unless the property is brand new and you will be the first owner, it is up to you to find out everything you need to know before you exchange contracts.
Do your homework [It will save you money]
Doing a bit of research can save you a lot of money.
Pig in a Poke
Literally means buying something without checking it first.
Would you buy a 'used car' from a private sale without checking it over first? If you don't know much about what to check, wouldn't you ask a say a mechanic to check the car over?
Do people buy property without having everything checked first? Short answer - YES!
Surveys
'Do I need to have the property surveyed?
I paid for the mortgage company survey'.
The mortgage company survey is just a valuation against how much you are asking to borrow. The surveyor only looks at the property for a 'guessed price'. Two prices are 'guessed'. One price is the 'Market Price' - what is a reasonable price for a property in reasonable condition in a specific area.
The surveyor looks at similar properties and what they have SOLD for. Not what the Estate Agent has put it up for. The difference can be £ tens of thousands less.
The second value is an
Auction Price. It is generally about 80% of the 'Market Price'. If you default on your repayments the mortgage provider can sell the property quickly at Auction.
Dangerous Contracts
Recently there has been a new type of Contract that some Estate Agents are 'pushing' customers to sign. Marketted as a 'Reservation Contract' potential buyers are pressured into signing the contract.
If not signed, the buyer cannot proceed. In one recent case the buyer was given the contract to sign after being told it would stop anyone else being able to beat her to buying the house. Completely untrue. Until the Exchange of Contracts a property can still be sold or bought.
The Contracts are evidently 'legal' in the UK and have been tested in an English Court. One case the buyer who pulled out of buying a property had to pay £35,000 in compensation. The Judge ruled it was 'legal'.
The ONLY parties that benifit from the 'Reservation Contract' are the Estate Agent, the Company that provides the contract (there are many articles on the Internet to read), and 'possibly' the vendor.
If a vendor puts property up for sale there are several reasons it doesn't go through to 'Exchanging Contracts'. Signing a 'Reservation Contract' does not stop any of the reasons. It just adds
STRESS
to the buyer.
My advice is not to sign any 'Reservation Contracts'. If the Estate Agent insists, find another Estate Agent and make your views known on Social Media.
Contract Law
As with any contract, it doesn't stop anything from happening any more than a road sign stops people speeding.
It may be the case the vendor has more than one Estate Agent trying to sell their property. They are not supposed to if they are using the Reservation Contract. The vendor may have 'conveniently forgotten' that they have employed another Estate Agent and not terminated that contract.
We will name them Estate Agent 1 (EA1).
EA1 introduces a 'potential' buyer to the vendor and 'an offer' is put in. They offer £10k less than the 'asking price'. The property has been 'on the market' for over 6 months and the vendor hasn't had any potential buyers, so accepts the offer. EA1 then pushes forward a 'Reservation Contract' stating that it will 'protect' the potential buyer by 'taking the property off the market'.
EA1 says: 'It will stop the vendor changing their mind' after the buyer has paid out for a Building Surveyor, Solicitor and all their costs. It is endorsed as a 'good idea' by 'Phil Spencer' according to the Internet.
EA1 advises the vendor it is in their interests as it will ensure the buyer proceeds with the purchase. Potential buyers are known to threaten to 'back out' if the vendor doesn't reduce the asking price.
The other Estate Agent (EA2) continues to advertise the property according to their contract. They obtain an interested potential buyer. EA2 is more traditional Estate Agent. They don't push the 'Reservation Contract'. Their potential buyer offers more than the asking price as they really like the property and don't have a property to sell = no chain.
What will be the outcome (Apart from MORE STRESS?).
In the example shown in 'Dangerous Contracts', the buyer became physically sick with STRESS and WORRY. She hadn't read the small print of the Reservation Contract. The Estate Agent just told her to sign the papers so she could proceed with the sale. If she didn't sign, she couldn't put in her 'offer' or proceed. Her case has gone to 'a adjudicator' as part of the Terms of Agreement' of the 'Reservation Contract'. There is a set fee required of £500+VAT. There can also be fees from any legal help, and from the Building Surveyor for all the additional work involved. [Stop press! The adjudicator ruled she would have to pay compensation for backing out of the 'contract'. The house was surveyed and found that the 126 year old slate roof needed to be replaced. Major sewer issues (a previous owner had carried out illegal drainage of a WC that didn't meet the Building Regulations if it had been applied for. The work required to put the semi-detached house into habitable condition would be in excess of £40k. That was the reason the lady didn't want to proceed. The 'adjudicator' works for the Reservation Contract Company).
The firm behind the 'Reservation Contract' states: 'it provides a faster and more secure home moving process which is recommended by Government in their How to Sell & Buy Guides'. That is totally untrue. The actual wording from that documents is: '• whether the buyer is willing to enter into a reservation agreement to show they are committed to buying your property and prepared to pay you compensation if they pull out of the deal'. There is nothing about being recommended.
copyright: HOW TO... SELL A guide for people looking to sell a home in England and Wales. The full document can be read On-line free of charge.
As with any legal contract it can go through smoothly. OR, it goes to Court. Court action it is expensive. Solicitors hourly rate is about £319 per hour in Outer London according to the Government Guidelines January 2026. If it escalates to requiring the services of a barrister it is normally at least £1k per hour, or an agreed fee. Barrister overheads tend to be greater that those of a Solicitor.
DO YOU REALLY want to become tied to a 'Reservation Contract'?
It is VERY STRONGLY RECOMMENDED that you download the whole contract and read ALL the smallprint in detail. It could save you a LOT of STRESS later.
Yes, there are those who are not genuine. That includes some unscruplious Estate Agents claiming there is another buyer offering more (Ghost buyers). Estate Agents normally work on a percentage of the Selling Fee.
Gazumping
There are several genuine reasons that a house purchace doesn't go through to completion. Nothing to do with 'Gazumping'
These are just a few of actual cases that have broken the 'chain':
One of the other buyers has:
- had their mortgage declined
[self employed person could not prove sufficient income = mortgage offer declined]
- been made redundant
[no income = mortgage offer cancelled]
- a Building Surveyor that found issues
[issues that will potentially cost a lot of money to rectify, or a lot of upheaval]
- the 'searches' have come back indicating 'illegal' building work has been carried out
[a very common issue where the vendor has carried out building work without permission]
One case a very wealthy vendor had a large mansion built (£4m +) on his land without any Planning Permission or Building Regulation Compliance.
The majority of examples discovered by a Building Surveyor are on a smaller scale such as removing structural walls, converting garages, building rooms in the roof etc. No permission or Building Regulation Compliance.
A very recent case - the property had illegal drainage from a bathroom. To rectify the problem would cost the buyer several £thousands and cause a lot of disruption.
The Terms and Agreements of the 'Reservation Contract' suggest there are several reasons that either party can withdraw without penalty.
In reality, the firm challenges ANY reason for withdrawing and requires 'arbitration' by 'their' professional adjudicator. Not free, as suggested in their publicity. £500 + VAT.
Has it got to be an RICS surveyor?
Building Surveys haven't got to be carried out by an RICS Surveyor as suggested on some Websites. WHICH for example states:
'Before commissioning a survey, you should check that the surveyor is a member of one of the two main accrediting bodies: RICS or RPSA' . It is NOT true.
There are many qualified and experienced Building Surveyors that are not memebers of 'those clubs'.
Having read several Survey Reports produced by RICS members, one who was FRICS, a 'fellow' member. He had produced a very expensive report that if one of my students had presented it as an assignment, it would have been returned as in need of a lot more work.
The important part of choosing a Building Surveyor is to know how experienced they are. Qualifications are not experience. Freelance surveyors apart from being fully qualified and experienced, should also be insured for Public Liabity and Professional Indemnity.
If anything goes wrong with the services of any Building Surveyor, RICS, RPSA or Freelance you need to sue for damages. Those 'clubs' do not provide any more protection in addition to English and Welsh Law. (Scotland has different Laws for buying and selling property). That is the reason for ensuring all Building Surveyors have current the insurance cover.
A real life example:
A Survey report produced by another RICS Surveyor:
He stated: 'that a property had subsidance and that a Structural Survey was recommended'.
That was a 'Level 3' Full Building Survey costing £900 + VAT. The surveyor had stated he had carried out a 'drop heel' test on a solid concrete ground floor. [Obviously he hasn't a clue what that test is all about].
His report also stated that:
- 'The drains were not inspected and that a specialist drainage firm be employed to carry out a full camera survey'.
- 'The electrical circuitry should be tested and inspected by a qualified electrician'.
- 'The gas boiler be inspected by a Gas Safe technician'.
The survey had several generic pages of 'twaddle' about his qualifications and the fact he was working for a firm of Surveyors and therefore could not be 'personally' held legally responsible for anything in his report.
The survey had been for an ex-colleague's daughter. The vendor was an elderly lady who had recently lost her husband and now wanted to down size from the family home. She had lived in the house since it was built in 1960.
Anxious that the house had 'subsidence' problems according to the RICS surveyor's report, my friend wanted a second opinion. Now both retired, my colleague and I asked if we could see what the 'RICS' surveyor had reported. We spent nearly 3 hours doing a full building survey. Checked the drains, inspected the electrics and checked when the gas boiler had last been serviced. The loft had been fully boarded out and well lit. The loft was empty other than the water storage tanks.
Over a mug of tea, the lady told us the other surveyor had only taken less than half an hour to do his survey. He hadn't lifted any manhole covers or flushed any loos or turned on the taps. Didn't check any of the windows and doors. He hadn't even been in the loft, just looked from the loft ladder.
Subsidence? None at all. No signs of ground movement. The original ashfelt driveway and path around the main house to the detached garages was still in near perfect condition. No cracks or repairs. Slight wear of the surface - (but it was nearly 65 years old now). The extensive lawn area and mature trees (a very large garden) had no cracks or changes in levels.
What he had claimed his 'drop heel test' had found was a very small ridge under the carpet in the large hallway. If the 'surveyor' had bothered to look, he would have noticed that the second fix carpenter had cut the skirting around the ridge. It is easily detected that the skirting was an original. We asked the vendor if we could lift that part of the fitted carpet - no problem as she wanted to move house.
The ridge in the concrete screed was where they had stopped as one bay against a timber plate. Then removed the plate and placed the second bay of screed. The very small ridge was where the two bays had joined. If the surveyor knew anything about construction site work, he would know that concrete was commonly made on-site in the 1960s. Trench fill hadn't been thought of so even foundation strips were site mixed concrete.
The surveyor had missed:
- the leaking roof and green / brown mould growing on the underside of the roof of the second garage.
[Inspecting the roof covering which had a layer of fallen leaves, it was obvious the roofing felt had seen better days].
- the full height hairline crack in the house external skin of brickwork. (Cavity wall)
[From the colour and the dirt in the crack it had been like it for many years, possibly a decade or more. A very thin hairline crack less than 1mm wide likely caused by thermal movement on a south / west facing wall with dark coloured bricks.
Where windows are close to the corner, the thermal stresses often break along the edge of the spandrel panel (brick panel below the window). In this case French doors on the ground floor with a wide window frame on the first floor. Not a major issue as the wall ties and inner leaf are carrying the floor joists. Stability is maintained and the outer leaf would be held the wall in place.
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- Flying the nest for the first time - need help?
- Buying as opposed to renting - it's now down to you
- Wanting to up-grade - security, simple maintenance
- Problems with mould and condensation
- Thinking about 'retro' thermal insulation
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