During a recent trip to England, I had the pleasure of chatting with numerous locals about how homes are bought and sold in that lovely country.
The big city (a.k.a. London) is vicisiously short on supply which is resulting in stories full of puzzling decision making, angst ridden buyers and eye-popping purchase prices. For example, I heard of what was described as a fairly average semi-detached home going for 1.2 million pounds (approximately $2M Canadian).
And this was in a neighbourhood of fairly average white-collar folk, not footballers and Big Brother winners.
I actually read in one article where the country has an appetite for nearly 250,000 new homes per year. So on top of all of the other factors, the shortage of supply is a massive driver that is perhaps larger than what we are experiencing here at home.
The one huge, almost incomprehensible factor in all of it though is the certainty, or blatant lack thereof, in any contract that is signed. Imagine this scenario:
You make an offer on a home and the high-level negotiations begin over the course of the next few days. They sign back to you. You ponder, cosider and ultimately sign back to the seller and as luck would have it, the sellers accept making your offer now a conditionally accepted purchase and sale agreement.
Then over the next 7 or 8 days you work through the inspection, financing and whatever other conditions you have included as part of your due-diligence. Now the good news…all is well and you can remove your conditions making it a firm sale! The count down for closing date begins as you start packing and sorting, calling utility companies, forwarding mail, picking out paint colours, measuring for furniture and on and on it goes.
All is well yes? How about 3 weeks later you get a phone call that the sellers have actually received another all cash offer from new buyers for an extra $20,000 so just like that, you’re out! Really…think about that. And we talk about the stress of moving?!
Or reverse that scenario and put yourself in the shoes of the seller. The deal goes together, all is well, boxes are being filled, silverware is getting wrapped, addresses are being changed and the world of home selling is just fine thank-you very much.
Fast-forward a few weeks when you get the call that the buyers have realized that their childern’s schooling will require them to move to another side of town. Or their dining room furniture suite won’t fit. Or the wind blows in the wrong direction. BOOM! The deal is done.
Imagine a system based entirely on the intent and psychological positioning of the people involved. At virtually any given time all that is set-up and arranged can be wiped out.
One of the gifts that travel provides us is perspective. The ability to look outward and relate it to what we experience on a daily basis. And having been here numerous times, it still shocks me to hear the stories and realities of a system of buying and selling homes that is so truly foreign to ours.
And this doesn’t even touch on the concept of representation or how homes are found, marketed and negotiated.
For some fun, Google these words: Gazumping and Gazundering
Do you have any epic tales of real estate in other countries? Let us know…we’d love to hear them!
Thank-you for visiting!