Mortgage offers being withdrawn due to delays

Mortgage loans are being withdrawn due the legal transfer of property title from seller to buyer taking so long, a new survey of estate agents has found.

Speaking to the owner of Gordon Hughes Estate Agents which are located in Leitrim and Meath, Mr Hughes said that it was a big issue. "We've had a number of cases over the last two or three years where people's circumstances may have changed; they were changing job etc. and you normally have to be in a position from a while, around three months, before you can even apply for a mortgage. It is creating massive disruption." 
A massive 84% of agents say sales have fallen through because of such delays and on average, conveyancing of a property has been found to take about four months to complete – over 10.4 weeks between a sale being agreed to the signing of contracts, plus a further 5.3 weeks between the signing of contracts and the closing of a sale.

Mr Hughes said: "Some mortgage approvals can last up to six months and we've actually had people where their loans have experienced and they had to go back to the bank and reapply. With mortgage interest rates going up, they've missed out on better rates."

He added that between 30per cent and 40 per cent of sales fall through first time around. 

Conducted in July with 534 agents participating, the survey also found that 88 per cent of IPAV members have experienced delays in the conveyancing process and on a scale from 0 (least important issue) to 100 (greatest issue), on average respondents ranked the conveyancing process at 75. 
It also found that 70 per cent said the withdrawal of loan offers occur occasionally, 26 per cent said it occurred frequently and 4 per cent said it happened very frequently. 
60 per cent of respondents said that delays in securing documentation and problems with deeds were the biggest reason for conveyancing delays occurring and problems with communicating with the vendors’ and purchasers’ solicitor were ranked highest by 23 per cent and 14per cent respectively. 
86 per cent said that conveyancing times have not improved since IPAV’s first conveyancing survey in 2015 and 75 per cent said that initiatives put forward by the Law Society in 2019, such as the Pre-Contract Investigation of Title (PCIT) have not improved the situation with 62 per cent of respondents saying the current conveyancing process is not at all efficient. 
Pat Davitt, IPAV Chief Executive said: “Conveyancing delays put extra worry and pressure on purchasers and vendors as well as extra rental costs too in many cases at a time when budgets are very tight.” 
He said the Sellers Legal Pack for Property Buyers’ Bill 2022, due to reach Second Stage in Dáil Éireann on October 5, is designed to address the situation and make the whole process more efficient. 
He said the survey found that 97 per cent of IPAV members support the legislation, because of its clear benefits and the certainty it gives vendors and purchasers.
“The Sellers Legal Pack involves gathering the critical documents up front prior to a property going on the market. It is currently used very effectively in online and public auction sales for many years,” Mr Davitt said. 
He said it front-loads the current conveyancing process rather than beginning it when a property goes sale agreed. 
“The Sellers Legal Pack Bill, when enacted, will speed up the entire sales procedure without adding any further costs to the consumer, and it will also help put an end to the practices of gazumping and gazundering,” he concluded.

Mr Hughes agreed saying that "I think it is a really good proposal and I don't see any negatives for anybody in it. It takes four to five months to complete a sale and that is causing huge frustration because a lot can change within that timeframe."

He said that when it comes to one-off houses "in rural areas, that there is problems with the title - that the septic tank is in the wrong place or there are planning permissions issues. We will certainly be making representation to all the politicians to support it because we don't see how it will negatively impact anyone."

He explained: "Basically, it's going to ensure owners, before they even put their property on the market, have everything in order. For example, we put a property on the market for sale and the client maybe has a mortgage on the property. When their solicitor requests the title deeds from the bank, it takes about six weeks to get them. So delays such as these are happening just because people don't have their ducks in a row."

He said the new Bill would be a "win-win for everybody" as solicitors "are under a lot pressure as soon as the property goes to 'agreed' and are running around trying to make that property tax is up to date, that they have a certification of compliance for the houses. The Bill would ensure that people have their property ready before putting it on the market. There is no reason a sale shouldn't close in five or six weeks."

Mr Hughes continued that due to properties not being sale-ready, "buyers end up changing their mind and pulling out of the sale.

The Bill would benefit from the seller too because it means they're not hanging around waiting and frustrated too. The whole process will just move quicker. And from our point of view, as agents, it means nothing goes on the market without being ready."