Preliminary contracts – a good or bad idea?

Preliminary contracts – a good or bad idea?

We recently ran a story regarding the E-Homebuying Forum’s roundtable event which debated the introduction of preliminary contracts as a standard procedure — following a poll of our readers, in which 76 per cent were against the idea of preliminary contracts, Tom Parker, Chairman of E-Homebuying Forum, had this to say:
“It is interesting to see the results of Today’s Conveyancer’s poll, given that the EHF is continuing to investigate how pre-binding contracts could be implemented in the UK. The Forum’s initial work in this area has shown that pre-binding contracts would be a good first step in preventing gazundering and gazumping in residential property sales. We believe that a pre-binding contract with a 5-10% deposit for example, would give a serious indication of the intent to purchase or sell a house, subsequently discouraging timewasters and speculative sellers, and encouraging greater certainty in the market. We recognise the challenges we face, and although it may not receive support from every firm in the marketplace, our work so far has shown a consensus on the benefits for consumers and industry alike to introducing such a contract.”
The E-Homebuying Forum are looking for greater transparency, efficiency and commitment within the home buying process in the hope of bringing faster certainty to consumers.
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