The Conveyancing process has been hit by another G!  Previously in conveyancing transactions, we had the  delights of gazumping and gazundering in the property market, we now have another  conveyancing   demon -   gazanging.

In Conveyancing Terms What Is Gazanging?

In conveyancing terms  gazanging is when seller in a conveyancing transaction changes their mind with draws from the conveyancing transaction  at the last minute, leaving the buyer conveyancing transaction with the wasted costs of mortgage application money, survey fees and legal fees – not to mention probably a lost sale in their related conveyancing transaction  as they now cannot move from their existing property.   Research published on the  In-Deed  website suggests that in conveyancing transactions throughout England and Wales  in the first half of 2011 sales fell through at the last stage of the conveyancing   process in more than 54,000 conveyancing transactions because sellers changed  their minds and opted not to continue with the conveyancing process and to stay put.  The instances  of sellers in conveyancing transactions  pulling out had risen by 20% over the first six months of  2010 and was now expected to have a bigger effect on the conveyancing and property market than gazumping.

What Is The Cause Of The Increase Of Conveyancing Transactions Failing Due To The Seller Pulling Out?

One widely held theory is that  it is a result of the combination of the uncertainty of the jobs market and the economy as a whole and the under-supply of suitable homes.   In the research published by In-Deed, 12% of the sellers who changed their mind during the latter stages of the Conveyancing process,  in the first six months of 2011 blamed uncertainty about their future job and income stream and 28% could not find a suitable property to move to.  These factors combined with poor consumer confidence and a dearth of mortgages  indicate that gazanging is likely to be a common feature of  conveyancing  and the property market for some time to come. 

A less charitable view is that we are seeing an increasing number of ‘speculators’ testing the market, with sellers accepting offers, beginning the conveyancing process by entering the  conveyancing transaction  and then delaying the conveyancing procedure at the  exchange of contracts stage  for as long as possible to attract a better offer.

There is even a school of thought that believes that it is a unforeseen consequence of the abandonment of Home Information Packs(‘HIPs’) in the conveyancing process.    Whatever the views on the merits or otherwise of HIPs, if , before marketing their property or  entering into a conveyancing transaction a Seller has had to pay out £200-£300 on a HIP they would be less likely to abandon the conveyancing transaction for the sale of their Property  on a whim.

How Can A Buyer In A Conveyancing Transaction  Protect Themselves From Gazanging?

A buyer can protect themselves by choosing  the right Conveyancer  to act for them in their conveyancing transaction.   One of the biggest factors in the conveyancing process  that creates the opportunity for gazanging  is the delay.  The longer the  conveyancing transaction takes due largely to poor management of the conveyancing transaction by  inefficient conveyancers, the more time the seller has to reconsider.  A conveyancer cannot stop his client from pulling out of the conveyancing transaction , however if  the buyers solicitor is slow in raising enquiries and responding to replies and progressing the conveyancing process ,  the conveyancing transaction will be unduly delayed  and doubts and frustration  will creep into the mind of the Seller.    If the sale and purchase conveyancing transactions progress quickly and efficiently there is less time for doubt or frustration. 

Another factor is to spot the speculator – are they really serious about selling or are they just ‘testing the water’?    Make sure the Property is taken off the Market once  your offer is accepted and the conveyancing transaction has begun.   Has the Seller found an alternative Property to move to? Is there a related conveyancing transaction?  If not, beware!  If they have found an alternative property – do they have a mortgage offer?  Waiting for a mortgage offer can slow the conveyancing process down considerably  especially as getting a mortgage offer is a more involved process than it was in the boom days when mortgage offers were handed out like smarties – there are a lot more checks and hoops to jump through before the offer is issued.  This is particularly the poignant if your Seller is seeking to downsize for financial reasons- do they have the financial stability to pass the checks required obtaining mortgage offer?  Have they got the equity or other funding to pay the deposit on their new property?

At iconvey, we are specialists in conveyancing and Property Law   We ensure that you are always aware of the costs at the outset with a transparent fee structure and no hidden fees.   To discuss your needs or to obtain a quote for your conveyancing visit our website:   http://www.iconvey.co.uk