You Musk keep your property promises - Gazeal Reservation Agreements
Hearing the news of Elon Musk withdrawing from the purchase of Twitter is going to be one of the biggest legal battles we have ever seen. ' what does this have to do with property?', I hear you say. Actually, if we compare it to a reservation agreement, where both a buyer and seller are locked into the sale of a property, it's more than you think
Every deal matters
When it comes to purchasing a property, we all know someone, if not us, who has been let down, potentially at the last minute. It' causes so many problems, and nearly always roots back to lack of information. The true value of information though, is exactly what is put on the table when the deal is on offer.
Elon Musk – founder of Tesla and SpaceX has given more light on the importance of knowing the right information, and using it to aid his decision to pull out of what was one of the most expensive deals we have seen.
Of course, we aren't all as privileged as Musk, and our houses certainly are worth nowhere near the £37 billion that Twitter is (imagine that!) but any lack in communication that affects deals is surely to affect the final hurdles, the same way any one of us can lose out to our dream homes if not all information is given to us at the time we agree to it. What can save us? Our own Chris Ellis has some ideas.
Over to you, Chris
Knowing full well that things have to change, Chris is keen to display the parallels between the broken Twitter deal and the property market.
“On the face it, there might not seem like crossover between Musk withdrawing his bid for Twitter and the property market, but look a little closer and there are a lot of parallels,” he says. When referring to the rather interesting £1 billion break-up fee or reservation agreement, he thinks the sum was incorrect.
He goes on to say, “The reservation agreement in place here wasn’t strong enough, and the amount of upfront information being provided wasn’t enough for one side. In the property industry, this is an all too common problem, and one that can be solved by solid reservation agreements and the correct levels of upfront information.”
Seeing the comparisons clearly, Chris says, “It's a bold claim, for sure, but if Musk and Twitter had been using digital reservation specialists Gazeal's reservation agreement facility, we might not be talking about the possibility for one of the largest and most expensive legal battles in history.”
Chris knows that more upfront information on listings is beginning to happen, and more guidance towards this. There is also talk of portal listings eventually being rejected if they don't have the correct material information. As rosy at it all sounds, and certainly a step in the right direction, much more needs to be done.
Chris is keen for the current political uncertainty to be pushed aside in favour of cross-party agreement that improves home buying and selling should come with more
He says the upfront information project shouldn’t be distracted by the current political uncertainty that shrouds the country, and that it should be automatic that both buyers and sellers are involved with far less homes falling through.
Change is happening, and that will not be affected by a change of Prime Minister, which bodes really well for the housing market.
Money is irrelevant
With the amount at stake, it's surprising that more protection wasn't given to both Musk and Twitter, and it seems a bit mad that a deal at this level didn't have more barriers in place to prevent a withdrawal at such a late and crucial stage. With many believing it was all pretty much done and dusted, many were shocked that it collapsed.
With Twitter not wanting to back down from this let down, Musk is lucky enough to be able to take the issue to court and fight it out, but the vast majority of us are worth nowhere near his fortune. So what does that mean for us?
Chris thinks we need a system, both in property and elsewhere, that helps and protects you, so that this daily occurrence can be prevented. Whilst what we are fighting for may be different, we need to pursue the importance of protection, so that we can ensure better ways to buy and sell, without the disappointment behind it.
Buyers and sellers will benefit
With a reservation agreement in place, we want to make it clear of not just the buyer benefits, but the sellers too. Imagine knowing that your house is sold, only to have to start again, at a potentially great financial loss. If you're in a chain, that would be immediately broken and all of it not your fault.
Similarly, buyers have their hearts set on the house of their dreams, only to be gazumped by a higher price. Reservation agreements would ensure a much lower risk of any of that happening, and sets both buyer and seller up for an honest, positive sale.
What do you think about these parallels? It certainly has given us food for thought, and we hope to see proper change for all very soon.