08/06/2007 By dadmin 0

House market in UK

As we are now in the process of buying a house in UK, we get to know the local system and what we see is quite scarry. Of course I cannot even try to compare it with Finland, where you can buy a house in a week, but it’s even scarier than US though very similar in some parts.

The scarry part is that the offer acceptance is not binding, which can lead to what is called “gazumping”, where the seller or the buyer can jump off at any time before the contracts are exchanged, without any penalty. And it takes quite some time till the contracts can be exchanged as all the local searches and other surveys have to be done before that. Also in US you could jump out but there was a certain small fee you had to pay. Here, nothing. It does not matter that in the meantime the buyer has to pay the solicitor (lawyer) for certain fees. If the seller changes his/her mind either because they found somebody that paid more or just because, you are screwed! And nobody does anything about this. It sounds more like corrupted countries to me. It has nothing to do with free market. Of course, that generates all sorts of blackmailing strategies, where the seller or the buyer can try to re-negotiate the price at any time.
All would be still ok if the exchange of contracts would be done soon enough so that you won’t have to live in this panic phase for too long, but here is where the whole process seems like US all over again. Getting a mortgage approved could take about 3-4 weeks and getting the contract drafted by the solicitor would probably take something similar. Not sure what they’re really doing, but they really take their time!

Well, these being said, I am still hoping for the best and hope that we manage to buy this house without any problems. On the positive side, the further we go in the process the more security we get, as the seller would probably not like to find somebody else and start the whole process again. So, let’s see…