AN EDINBURGH-based estate agent says that home sellers are “losing out” on thousands of pounds by not catching onto the change in market post-Covid.
Solicitors and estate agents Lindsays has warned buyers that offering on a property “subject to sale” is becoming increasingly ineffective and risks them missing out on a move as a result.
The firm believes home sellers are sacrificing “significant” amounts of money by rejecting their highest offers – when those offers are subject to the sale of another property – and instead opting for a chain-free sale.
House moves subject to sale mean that a buyer will not complete the purchase of their next property until their current one is sold, and differences, the firm is finding, are often many thousands of pounds.
Its use became almost standard practice in the intense heat of the post-pandemic market, with buyers wanting the guarantee of knowing where their next home will be before selling their current property as demand outstripped supply.
Maurice Allan, managing director of Lindsays’ residential property department, said: “Being the top offer is no guarantee of success in this market.
“Those who are not recognising that the market has shifted are losing out. Once sellers are in a position where they have sold, they are able to go out and buy what they want.”
The independent Edinburgh-headquartered firm expects that use of the deal condition will decrease rapidly in the coming months as would-be buyers wake up to the fact they are being disadvantaged by it.
The biggest difference Lindsays has seen accepted when the winning bid has not been subject to sale has been almost £20,000 behind the highest offer, which was subject to sale.
Lawyer Andrew Diamond, a partner and head of residential property at Lindsays, said: “Purchases subject to sale are the wrong tool for the current market.
“People are cottoning on to the fact that they are inappropriate, ineffective and holding them back.
“Those who realise this now are going to get ahead and have more buying power.
“We are seeing sellers leave significant sums of money on the table by not accepting the highest offer for their property because that bid is subject to sale.
“They would rather accept less than face the added complication of their deal being dependent on an unknown sequence of other transactions which could fall apart if any one in that chain fails.
“Those who have sold their homes are then getting the pick of properties because they have money immediately available.”
But, with a market that is now more tradable and with more properties available, it is the sellers who are seeking the certainty of knowing that a deal for their home can complete and that they can move on without having to wait for their buyer to sell.
Andrew added: “Bidders trying to use subject to sale are being handicapped. Those who are not restricted by this are going to find themselves in a far stronger position going up against those who are slower to realise that this is happening.
“In many ways, offers subject to sale had become a habit. They were fine for the market in which they grew, but not now. Within six months I am sure those making those sorts of offers will be in a significant minority.”
