Contract race is a situation in which a seller is ready to deal with the process of conveyancing, with more than one buyer. Here, the seller will contact many buyers on the condition that he will exchange the contract with the person who completes the procedures first. This is never an easy thing to do. Therefore it is essential to first consult with a proficient conveyancing solicitor before you decide to go ahead with a contract race.
When you move forward with a transaction, you are not legally committed to any person. You have the freedom to step back at any point. The seller also has similar rights. Similarly, if you are planning to buy a property in a contract race, make sure that your solicitor is well aware of the matter. Also persuade them to move things faster. In this electronic era, you can definitely make things move within hours instead of days.
The process of contract race is simple. If you are ready to sell a property and want to move the transactions quickly, then you can start a race. If there are two or more people who are ready to agree to your requirements, ask your solicitor to send the drafted contracts to both or all the parties. The contract will be exchanged with whoever responds first with appropriate documents and money. The buyers should be intimated about the same.
Points to remember
This method is an alternative to gazumping. In gazumping, the contract is exchanged with the person who offers the highest bid. Whenever you are getting into a race, it is crucial to understand the strength of the deal. Also learn about the position and interest of other buyers involved in the race. If they stand in a strong position, speak to your property conveyancing solicitor immediately. They will help you get ready to succeed; they will also estimate the required time and schedule it takes to complete it in minimum time. The estate agent is supposed to stay impartial in such situations.
For buyers in race
If you are a buyer in the contract race, it involves many types of risks. If you are planning for a chain transaction and waiting for your property to be sold, then contract race will not an advisable idea. At the same time, you can move forward with a race, provided that you are in a position to raise an immediate bridging loan.
In certain cases, when you begin the transactions, you might be the only buyer. But there are chances for a second person to join the deal. In such situations, the seller’s conveyancing solicitor will inform you about the same and make notice of the race.
Check the deal
There is yet another warning. Make sure that the seller’s conveyancing solicitor has specifically mentioned that the contract will be exchanged with the party who completes the documents first. If this clause is not mentioned, the seller will have the freedom to choose the buyer for contract upon his will, regardless of whether you completed the requirements first or not.
Most professional conveyancing solicitors will advise against buying a property in race. However the final decision is yours. Make sure that your conveyancing solicitor is committed to this race. If the solicitor has to be prodded to move along, then the chances of winning a race is very low. Try and find a good conveyancing solicitor before entering into a contract race.