If a verbal contract is binding why is an offer to buy a house in England not binding. The conditions are witnessed by a third party, the agent and confirmed in writing, there is an offer and acceptance. There is financial loss should the sale fall through.
2006-11-23 20:35:14 · 6 answers · asked by Anonymous in Politics & Government ➔ Law & Ethics
This has been a good question for a long time. A verbal contract is binding (If both sides agree what was said) so I cannot see why this is not true in house buying.
It is in Scotland so it should be the same in England too.
What it needs is for someone who suffers financial loss (through someone offering and then pulling out, or someone not selling after accepting an offer) to take it as a test case to the courts. Or the European courts.
It is totally wrong that they English system allows it to happen. The system should allow us to sue the pants off the person responsible for making the deal fall through.
I think the solicitors and legal teams are a bunch of leeches too, by the way. The British conveyancing system sucks. Big time.
Hope that helps and good luck!
2006-11-23 20:52:10 · answer #1 · answered by superman in disguise 4 · 0⤊ 2⤋
Because it's an offer and called "subject to contract"
In reality Estate Agents should keep the property on the market during the sale process as they do in Scotland, but because of our (maybe misguided) sense of "honour" we give the buyer a chance to get their act in gear, but usually the buyer only starts to get a mortgage after the sale is agreed and there are also alot of legal technicalities.
We were recently buying a property until out solicitor found out that the land was not correctly registered and we were buying an unsellable property. At that point we had to pull out of the deal. Same as any business would pull out of a deal. If it was binding, then we would be in a huge financial mess.
By the way Ian, it's really easy to blame the Estate Agents and Lawyers, but having been an Estate Agent for so many years I can truthfully say that it is usually the Vendors that are greedy. As an estate agent, usually once the deal is agreed, they want to get it exchanged as soon as possible to get their money. Most solicitors are now no-exchange/no fee, so they just want to see the deal through. I got out of the business, because I got fed up of how nasty the General Public can be.
Plus, the point of an offer in England and Wales is the same as the point in Scottish law of a notification of interest NOT the point of sale. At that point, a Scottish Estate Agent won't take it off the market and the buyer has to go to alot of expense and doesn't even know if he is going to get it, so you tell me which is fairer.
Sorry, I get fed up of people keeping on about how great the Scottish system is!
2006-11-23 20:55:13 · answer #2 · answered by voodoobluesman 5 · 0⤊ 0⤋
This is because a contract for sale is needed to be binding, and a contract must contain all the terms agreed.
There is more to be agreed in the sale of a house than just the purchase price. The fixtures and fittings included or excluded from the sale, the completion date and matters relating to title must all be considered in the contract.
The result of a survey must also be considered. If faults are revealed you may lower your offer accordingly.
The law is that contracts for the disposition of land (apart from certain short-term leases) must comply with s2 of the Law of Property Act 1925. That is, they must be in writing, contain all the terms agreed and must be signed by both parties (or identical contracts exchanged).
You are not in a position to make that sort of decision until much later in the process than making an offer.
2006-11-24 06:39:32 · answer #3 · answered by in vino veritas 4 · 0⤊ 0⤋
This only applies to England and Wales.
In Scotland it is legally binding and if the sale is not completed their is compensation, this has been a big debate for years that England should be the same as Scotland.
The reason it is not is a simple one GREED basically from the estate agents and lawyers who love the "gazumping" game as the higher the price the more commission they get.
It is a disgrace as I have been in it and was very bitter with the house seller who had agreed with me the price and confirmed it was settled yet the Estate agent came back and I had to pay another 10k to get the property.
2006-11-23 20:47:18 · answer #4 · answered by ian d 3 · 0⤊ 1⤋
An offer is not yet a contract. Thus, anything stipulated in the offer is not yet binding because there is still no meeting of the mind between the parties. It is just a unilateral stipulation made by the party offering a service, property or item that is subject of the contract.
2006-11-23 20:56:17 · answer #5 · answered by FRAGINAL, JTM 7 · 0⤊ 1⤋
There are no doubt laws in England, as there are in the US, (the Statue of Frauds) that clearly state all contracts for the sale of real estate must be in writing or they are void.
Your fault for not getting it in writing. Next time hire a lawyer.
2006-11-24 06:26:31 · answer #6 · answered by Spellympics 2 · 0⤊ 0⤋