Thursday 19 July 2018

House sales now taking 200 days to complete

Stock image
Stock image
Wayne O'Connor

Wayne O'Connor

Busy house-hunters are being warned it now takes up to 200 days to complete a sale because of issues with contracts.

Estate agents are now calling for the sales process to be overhauled to allow for speedier sales and greater efficiency and transparency for vendors and those looking to buy a home.

The lethargic nature in which sales are carried out in Ireland and issues with contracts during this process means up to one-third of private-treaty house sales fail to reach completion, according to the Property Partners group.

Under the current system for private-treaty house sales, a buyer's solicitor only gets sight of the contract after a sale is agreed. This means issues often only arise very late into the sales process and can lead to the collapse of a sale after weeks, or even months, of negotiation.

Property Partners Chairman Ronan Long is now calling on the sales process to be revamped, and contracts to be exchanged much earlier in the process.

He said this could help ease pressures in the housing market by speeding up sales and reducing a level of uncertainty for anyone looking to buy.

"Introducing such a radical change will be met with resistance no doubt," said Mr Long.

"However, with consumer expectations changing, we believe the market will demand this and it will become de facto in the near future.

"The existing private treaty process places far too much stress on both parties and even more so if the deal falls through, which invariably can happen very late on."

He called for a move towards a model utilised in online sales platforms where sales contracts are exchanged prior to any bidding taking place.

Mr Long said this will speed up the process and prevent some sales from falling through after a long-drawn-out negotiation.

"This is how most online auction sales are now being conducted, resulting in less time-wasting and faster completion times," said Mr Long.

"Not only would it remove a great deal of stress and uncertainty for both parties but the time spent on the entire process could reduce by up to 50pc.

"The online auction model of providing contracts for review via secure web access only became commonplace in recent years, but it is now how most online auction sales are conducted.

"Under the current system for private-treaty house sales - which account for in excess of 90pc of all residential home transactions - a buyer's solicitor only gets sight of the contract after a sale is agreed. Impediments to a successful sale often only arise a considerable amount of time into the process."

It comes after Central Bank Governor Philip Lane said last week that house prices could fall over the next two to three years, despite the CSO warning that prices increased by nearly 13pc in the year to March.

Sunday Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business