"When a home purchase falls through it isn’t just stressful for all involved, it’s a costly process that takes billions out of the pockets of agents and conveyancers"
Moverly looked at how many property transactions are thought to have collapsed over the course of 2022 and what this means in terms of the cost incurred for both estate agents and conveyancers.
An estimated 31% of transactions are thought to fall through before finally making it to the finish line. The research by Moverly shows that this equates to 315,652 sales that have fallen through during 2022.
With the average estate agent earning £4,034 per transaction last year, based on the average house price of £284,100, combined with a typical agent fee of 1.42%, that’s a collective loss of fees totalling £1.27bn due to fall-throughs.
There are many factors that can scupper a property purchase.
Perhaps there is a complication with the buyer’s mortgage finance, or the purchase is reliant on them selling their own property.
Sellers could also receive a higher offer, in what’s known as gazumping, or the buyer could reduce their offer at the last minute, known as gazundering.
It’s not just the agents that miss out on earnings from the transaction.
Conveyancers typically make £2,239 per transaction when representing the buyer, or £1,069 for the seller. As a result, Moverly estimates that conveyancers working on behalf of the nation’s homebuyers could have lost out to the tune of £706.7m due to fall throughs in 2022, while those acting for sellers are thought to have lost £533m.
Of course, in some cases agents and conveyancers still end up earning money from the client after a transaction fails - it’s just an offer that needs to be resubmitted and more work needs to be done to get it over the line.
Moverly co-founder Ed Molyneux, commented: “When a home purchase falls through it isn’t just stressful for all involved, it’s a costly process that takes billions out of the pockets of agents and conveyancers.
“Even when property purchases go smoothly it still tends to be a long drawn out process, as the home needs to be listed, surveys need to be conducted and in many cases, mortgage finance needs to be secured before buyers and sellers sign on the dotted line. This provides ample time in which circumstances can change, or both buyer and seller can have a change of heart, allowing frustrations to build across the chain.
“While estate agents can lower the chances of fall-throughs by being professional and efficient throughout, a proactive approach in securing the information required for a transaction upfront can also help minimise the chances of a fall-through.
"In this respect, utilising digital property packs can help agents complete up to 70% quicker while benefiting from a significantly lower fall through rate which not only keeps the customer happy but reduces their financial losses.”
