WHY MATERIAL INFORMATION DOES AND SHOULD MATTER TO YOU
According to the recent industry research report ‘Back to the Future’ from tmgroup, mio and CDS 40% of property transaction delays are blamed on managing enquiries and duplication/confusing communication , with mortgage applications, ordering and receiving search results and log jams at HM land registry all featuring in the top five. These are perpetual problems that appear year in year out which has led the industry to consider how a single, universal standard of upfront Material Information would improve, streamline and maybe even resolve many of these issues.
However with so much variation in awareness, as evidenced in the ‘Back to the Future’ report where a staggering 51% of respondents had not even heard of it, uptake and interpretations of what material information or upfront information is, is a real concern.
So why should estate agents get ahead of the game now and start utilising material information upfront in the property transaction?
Let’s start with the basics
Trading Standards Consumer Protection Regulations are being revised, giving estate agents a legal obligation to include material information from property listings. These changes are split into three phases, with Part A already in place (Tenure, Price and Council Tax). Part B (material information such as utilities) and Part C (additional information that may or may not need to be determined, depending on whether the property is impacted by it) to follow.
So, doing nothing is no longer an option. Change is already here, with more coming down the tracks so it’s time to accept it, embrace it and understand how and why it will be a benefit to all those involved in the property transaction.
Why the changes?
The introduction of material information has clear benefits for all. Buyers will have increased confidence in the property they are purchasing, sellers will ensure they have a committed buyer lessening the likelihood of a fall through, and crucially for estate agents and conveyancers the transaction time should be sped up ensuring they see a quicker turnover on pipeline.
Increased confidence for consumers
Lack of information before entering into a property transaction can lead to emotional distress and financial loss for the consumer. Consumers are expected to make a huge upfront commitment on what is probably the biggest financial investment in their lives, with little to no detailed information about the property they are purchasing, until a lot further into the process. In what other industry would this be allowed to happen? That’s why CPR changes are set to help buyers make more informed decisions about the property they want to purchase.
Reduced financial risk for buyers and sellers
Typically, around a third of all property transactions fall through, and in many cases, this results in consumers facing financial losses which could have been avoided, with around 25% incurring wasted costs of more than £1000*.
According to the Halifax, the cost to move is already £12,000 for sellers, so if we want to encourage more sellers to the market, we must improve confidence in the way we do things and act to alleviate financial risks to the consumer. The provision of upfront material information is one effective way to lessen financial risks to movers.
Improved profits and reduced fall throughs
For agents and conveyancers the clear benefit is faster transaction times. Properties completing quicker with less fall throughs would see both agents and conveyancers benefitting from improved profits. Utilising material information upfront will speed the transaction up by ensuring that vital information about that property is gathered at the beginning of the process, enabling the resolution of any potential issues highlighted from the outset and guaranteeing committed buyers who are less likely to pull out of a purchase further down the process.
Help is at hand for estate agents
The Home Buying and Selling Group (HBSG) is proactively working with the industry and government to address the delays obtaining necessary material information and lack of transparency. They now provide agents a legally-recognised BASPI dataset for upfront information. Digitised versions, such as the mio Property Information Form - which forms the centerpiece of the sales progression platform’s new Seller’s Information Pack - offer a secure, quick and convenient method of obtaining, utilising and sharing material information with stakeholders, while initiating the sales progression process at the instruction stage.
Enable better collaboration with technology
Collaboration once again featured in the top three changes our industry wants to see in our ‘Back to the Future’ report, but we rarely see industry legislation that can actually facilitate this.
Jon Horton, mio Product Director, explains: “We’re already seeing several technology solutions, that deliver a simple digital experience for agents, sellers, buyers, and their Solicitors to complete and share more detailed information, much earlier in the process. There are clear reasons to embrace the benefits that this brings, particularly in a challenging market where Agents should look at every option available, to secure new business and manage a sale through to a happy conclusion. The biggest challenge is change itself, but logically upfront information makes sense to help reduce transaction times and mitigate fall-throughs - the two biggest worries for agency owners.”
Simon Wilkinson, owner of the Wilkinson Partnership and main Board Director at PropertyMark, has seen the positive difference upfront material information makes first-hand. He comments: “We have been providing upfront information over the last 3 years, for well over 1,000 properties. Without question, it has added transparency, flagged up any issues very early on and then had them resolved. Thus, it has speeded up sales and made the firm and my staff more professional.”
*Research On Buying And Selling Homes BIS/283
