The first UK residential sale where offer, acceptance and legal exchange all take place within minutes of each other online could take place this year.
The prediction has come from a commercial estate agent, who has himself now clocked up over £50m of property exchanges online – all achieved using his own software invention.
The first likely residential users, it is thought, will be buy-to-let investors and cash purchasers looking to close deals quickly.
At the heart of the system is that acceptance of the offer creates an instant exchange of contract – at a click of a button. Both the buyer’s and seller’s solicitors will already have done full due diligence.
Neil Singer says that the process cuts out fall-throughs, is quick and decisive, has posed no conveyancing problems for solicitors, and deals with money laundering concerns – and that there is no reason why residential agents cannot use the same method.
Singer, of Singer Vielle in London, initially developed software to handle online exchanges in his own business. He has now developed it for the residential property market and says that he has one large chain at contract stage, although he thinks that it will be a London independent who will get there first.
Singer said that the main issue he has come up against in talking to residential agents about his proposition, called Clicktopurchase, is that they tend to be protective of traditional practices – and are sceptical of change.
Singer said: “There is massive protectionism among agents, but this has to be the way forward. It is a natural and logical evolution in house selling. After all, the mortgage industry now operates almost entirely online.”
He also says that agents elsewhere may beat UK agents to it, with Clicktopurchase about to launch in South Africa, and negotiations going on in Ireland.
With the system, as used by Singer himself, properties are put on the market, flagging up an online auction in, say, four weeks. Bidders are not able to bid beforehand. The bidding itself typically takes a matter of minutes, just as in a ‘real’ auction.
Singer said that in his own business, the number of online exchanges passed the £50m mark with the sale of a commercial property in Doncaster for £3.6m.
In another recent sale, of a commercial property in Huntingdon, five bidders submitted online best offers by an 11am deadline. The highest was accepted and exchanged minutes later, at over £1.5m.
“Passing the £50m barrier has shown that property trading can be done online, as in other industries and for other commodities,” he said.
Singer explained: “I decided to try and develop an online execution for selling property – it seemed an obvious necessity given the way all businesses are moving online.
“No one had created a way to exchange a private treaty property contract online. I managed to do so and launched Clicktopurchase as a plug-in to my own business.
“I also wanted to create an online auction – however, not the Ebay style which has been tried many times and always failed, but one which totally emulated the ballroom experience but online. This is a second feature of Clicktopurchase. Thirdly, I wanted to add in the ‘best offers / sealed bids’ online.
“For the residential market in particular it offers speed, flexibility, transparency and accountability – when someone makes a Clicktopurchase offer, it is as if they have placed a signed contract on your desk for you to then sign for the vendor.
“So, when accepted, an immediate exchange occurs – no gazumping, and certainty for both parties to exchange a contract. It allows for conditionality for finance in order to cater for cases where mortgages are required, although I see this first being adopted where selling to residential investors and cash purchasers.
“At Singer Vielle, it has been used by the likes of Deloitte acting for Lloyds Banking Group, Anglo Irish Bank, UBS, etc.”
Singer emphasised that Clicktopurchase is not a property portal, but a software platform white labelled to each agent’s own business. Costs work out at about 5% of the agent’s fee.
A short and simple explanation can be seen using the link below, and we would be interested in readers’ views.