First-ever transaction with chain using Reservation Agreements

A PropTech supplier claims that an agency has secured the first ever transaction where the complete chain used Reservation Agreements.

Harrison Residential, a single-office agency at Sittingbourne in Kent transacting around 200 properties a year, used digital buyer information packs and digital reservation agreements.

However, the chain was small – only three properties.

Such agreements have been one of a number of innovations to the sales process being considered for some years by the Ministry of Housing, Communities and Local Government; a trial of the agreements was at one time mooted to be scheduled for early 2020 but even before the Coronavirus outbreak this was officially re-scheduled for the second quarter of the year.

Since then the virus mayhem and market closure for some weeks will have put paid to even that revised timetable.

PropTech company Gazeal – whose technology was used by Harrison Residential for the transaction – claims now to have 200 agents fully signed up to the service and “over 600 registered for onboarding” according to a statement from the firm.

One of the company founders, Bryan Mansell, says:

“The security offered by our reservation agreements and the fact everything can be done remotely and online has been a defining factor in the last few months.”

He says the Sittingbourne example is evidence that reservation agreements can work in chains, and not just in chain-free deals.

Even before the pandemic, the MHCLG made it clear that any decision to develop Reservation Agreements across the industry would take considerable time.

At the National Association of Estate Agents’ conference in February this year a department spokesman said the pilot project into the agreements would run for some six months and involve different agencies in different areas running various permutations – for example, some requiring £1,000 deposits from prospective buyers and sellers, and some requiring less or no deposit at all.

He said a key measurement of the success or otherwise of Reservation Agreements would be whether they succeed in reducing the current levels of fall-throughs, running before the pandemic at 25 to 35 per cent level according to MHCLG research.

After the six-month trial there would be an interim report produced.

If this suggested the trial provided evidence for the system to be rolled out, it would then require further discussions with “key stakeholders” and agreement on guidelines.

He told delegates that at next year’s conference – that is, in February 2021 – he hoped to bring them up to date with the findings of the trials.

And that was the timetable before the Coronavirus outbreak.

Kindly shared by Estate Agent Today