Industry

The Anxieties of First-Time Buyers (Gazumping)

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What are the first-time home buyers’ anxieties?

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First time home buyers (FTB) don’t know what they’re up against. It is meant to be one of the most exciting times in a person’s life, finally getting themselves on the property ladder, it doesn’t take long, however, for prospective buyers to realise the challenges they face.

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The buying and selling of houses can be a stressful business, and it's easy to think that all your problems will be solved once you've exchanged contracts. That's not always the case, as we'll explain in this article.

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There is a list of questions that first-time owners are afraid to ask about buying a home. These could vary from how much deposit is needed, when do I pay everyone involved in the process, and what is stamp duty?

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Homebuyers wish the processes were much simpler.

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What is Gazumping?

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Gazumping is a common practice in the property market, which is when a seller pulls out of an agreement to purchase a property before exchanging contracts.

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Gazumping usually happens when another party makes a higher or otherwise better offer on the house you are trying to buy. If the seller accepts, you lose out on the purchase – it’s as simple as that. Many find gazumping unethical, as it negates an existing agreement to sell and often leaves buyers in a worse financial position.

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At the point of gazumping, the buyers have usually paid various costs for the transaction, such as fees for mortgage advice, conveyancing searches and other legal fees, or valuation and surveyor fees.

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In a survey of those who bought a property in England or Wales since 2012, 31% had been gazumped. That figure rose to 52% among those who bought in London!

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Aside from a better offer, the other reason gazumping is so common is that the mortgage application process takes so long to finalise. This leaves space for sellers to doubt – will the transaction complete? Is the buyer going to come through with funding?

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They are then likely to entertain alternative offers from buyers. You may think that the moment an offer has been accepted, you're safe. But don't be fooled: there's still a chance that someone could change their mind before you get the keys to your new place.

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How can you reduce the risk of gazumping?

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There are a few ways you can decrease the risk of gazumping, like:

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Asking the seller to take the property under offer off the market;
Building a relationship with the seller – they are much less likely to pull out when they have experienced your love of the property personally;
Getting a mortgage in principle before offering, showing you can afford to take out the mortgage and preventing any delay;
Using a service like Acre’s property portal to check for likely conveyancing issues in advance of offering; or
Taking out insurance to hedge against gazumping and at least decrease the risk.

Using the right technology can really help streamline the process and keep deals on track. Getting mortgage applications and applications in principle submitted early can massively decrease the risk of gazumping. Using a conveyancing partner that has good technology ensures you won’t be starting from scratch once you instruct your solicitor. And as we mentioned above, getting an early read on any risk factors that might make this property slow to transact will be helpful in making sure delays aren’t tempting the seller to second guess.

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Lastly, the Government can contribute to reducing gazumping by intervening. In England and Wales, exchange of contracts is not legally binding, whereas in Scotland when a seller accepts the offer, it becomes legally binding. Unsurprisingly, many homebuyers wish gazumping was illegal. More and more homebuyers have expressed interest in the Government taking steps to prevent gazumping. While gazumping has been made illegal in Scotland, could the same be achieved in the rest of the UK?

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The aftermath

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If you're looking to buy a house, it's important to know about gazumping and how it could affect you. It's also important that you do everything you can to prevent losing the perfect property.

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Acre exists to help homebuyers get into the home of their dreams as fast as possible. Using a broker that relies on Acre’s technology will help you minimise delays, eliminate duplication and data entry, and get both the mortgage and the conveyancing right, the first time. All that’s left for you to do is to charm that seller into doing the right thing – and uphold their commitment to sell!

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If you would like to know more about how Acre helps make home-buying better, visit us at https://www.acresoftware.com/ or book a demo for your brokerage.

Acre is now Score

What's changed?

What's changing is the name and the way we look. Acre is now trading as Score, with a fresh brand identity to match, but everything you rely on stays exactly where it is. It's still the same mortgage all-in-one platform that advisors, firms, and networks across the country already use to grow their businesses, now presented under a name that brings us in line with the wider ClearScore Group.

Why the new name?

ClearScore acquired Acre earlier this year, and we've carried plenty of momentum into life as part of the Group since. Moving to the Score brand is a natural next step, because it brings us in line with ClearScore and reflects the mission we share, which is to make home buying quicker and easier and to help people take control of their financial lives. As our founder and Managing Director Justus Brown has put it, the day-to-day service you receive won't change at all, and bringing our brand together with the Group simply makes that shared mission clearer.

Has the mission changed?

Not in the slightest! We have always been here to make home buying quicker and easier, taking the pain out of the process so that people can get into their homes sooner, and that is exactly what we will keep doing, with a good deal more behind us now to do it well.

Will the service change?

No, it won't, you'll continue working with the same platform and the same people, and your existing contracts and commercial terms stay exactly as they are, still held with the same legal entity, Acre Platforms Limited. Our Customer Success team will keep looking after you just as they do today.

About ClearScore

Who is ClearScore?

The ClearScore Group is a global leader in financial marketplaces, helping over 27 million people access credit, insurance, and other financial products with greater transparency, fairness, and control. It founded its flagship UK credit marketplace in 2015, has since expanded across four continents and into new verticals such as its DriveScore app, and now works with over 200 partners worldwide. ClearScore is profitable, growing, and on a mission to make personal finance clearer, calmer, and easier to understand, and that mission runs right through its culture, along with a genuine belief in giving people more clarity and control over their money.

How do we fit into ClearScore?

We sit alongside ClearScore's other technology platforms, including D•One, its open banking service for lenders, together powering borrowing and home lending across unsecured credit, auto finance, and now mortgages.

What does the change
unlock?

What does joining ClearScore bring?

Joining ClearScore gives us a great deal more room to grow. With their backing, we can accelerate our technology roadmap and bring new AI-powered features to the platform faster than we could before, and we can enrich what we build with ClearScore's proprietary data and insights, getting cutting-edge technology into the hands of mortgage and protection businesses sooner.

What do brokers and firms stand to gain?

For the brokers and firms who use us, it really comes down to growing faster. Drawing on ClearScore's financial power and its UK user base of over 16 million, we can build the features you ask for more quickly and bring more leads into the ecosystem, which gives brokers, networks, and advisors more opportunities to win new business.

Is the business growing?

We're growing quickly, and so are the firms who build their business on the platform. Since the acquisition, we've seen record numbers of monthly mortgage submissions come through Score, and we've more than doubled our revenue year on year, with growth of over 2.5x. That momentum is showing up in our customers' businesses too: firms on the platform are saving each broker around four days a month on application processing, identifying protection needs for 85% of their mortgage clients, and doubling their client conversion rates. Delivering results like these takes serious engineering and serious investment, and with ClearScore behind us we can keep raising that bar at a pace few others in the market can match.

Why build your business on Score?

Because you'll be choosing a platform that is built to last. A lot of new mortgage tools have appeared lately, and many of them are small, pop-up CRMs put together quickly on basic AI, the kind of thing that can disappear just as fast as it arrived. Score is a very different proposition, we are an established, whole-of-market platform that brokers, networks, and advisors across the country already trust with their businesses, and we are now backed by one of the most advanced and reliable fintech stacks in the industry through ClearScore. A proven platform, real investment, and genuine scale mean we can keep powering ahead of newer, lighter-weight tools and keep building for the long term.

Independence and
ownership

Is Acre being absorbed into ClearScore?

No. We operate as an independent business unit within the ClearScore Group, with our full management team staying exactly where they are, and we'll carry on supporting mortgage and protection firms with the same data-driven platform, now with the reach and scale of the wider Group behind us.

Will our advice-first philosophy change?

No. We have always believed that the best mortgage decisions come from high-quality, personal advice, and it is a belief ClearScore shares. If anything, the direction the market is heading only reinforces it, which is why we will stay a whole-of-market platform focused on helping brokers do their very best work for their clients.

Your data

Is my data safe?

Yes, and nothing about the move to Score changes that. Your data, and your clients' data, is protected by exactly the same contractual obligations and technical safeguards as before, and being part of ClearScore does not give anyone new access to it. We will never introduce your customers to a third party without the right consent, and your clients always keep the rights to their own data. If anything, joining a group whose entire business is built on handling data responsibly, and only ever with the user's permission, raises the bar we hold ourselves to.

The best way to see what Score can do is to book a demo, and we'll walk you through the platform and how it could work for your firm. If you'd rather drop us a line, you can reach our sales team at sales@scoremortgage.com, or send any general enquiries to hello@scoremortgage.com.