Buying and Selling Real Estate in the UK vs. Austin TX

I recently had the distinct pleasure of helping a family relocating to Austin from London. The process started as it usually does with our buyers. They found us online and contacted me about buying a home in Austin. There was an initial phone conversation or two, and several emails. We actually made an offer on a home before they came, which didn’t pan out. When they arrived, we spent a couple of days looking at homes, barely missing a very good candidate in South Austin. I did my best, as we looked at homes, to explain everything I think buyers should know when purchasing a home in Austin, and which homes I thought were good candidates and which ones I didn’t, and the reasons why.

On the third day a new listing came on the market which had multiple offers by that afternoon, ours being one of them. We won the offer by writing aggressive terms and a quick cash close. The buyers are back in London, and I’m handling the yard care, checking mail and keeping an eye on the place until they move here in June (something a real estate attorney would no doubt tell me I shouldn’t be doing).

During my interactions with the Londoners, comments were made to me a few times to the effect that UK “estate agents” don’t do nearly the amount of work we do here in the U.S. I was curious about this so I asked for more detail about this via email this morning, so I could write something for my blog. The following is the response.

Dear Steve,

Thanks for the lawn thing, its really appreciated – please let us know when the bill comes in. If you were able to point us in the direction of some appliance dealers with websites that would be fab.

OK. Real estate agents in the UK. Please use this in your blog – the world should know! Now, where do we start,,,,,,,,,,,,,,,,

So, from a selling point of view; You approach any one of the many local “estate agents” and appoint them to sell your house. The commission is usually 1 to 2 %. You appoint lawyers to act for you (they fairly take the position of a US title company but without the good service). The estate agents advertise the house, and arrange appointments for the potential viewers to view the house although, often, they (the agents) do not attend viewings. The viewers make an offer and we accept. The estate agent advises the buyer’s and seller’s lawyers of the offer & acceptance, and that is it! They have no hand in inspections or any other aspect of the transaction. They merely advertise (in no way as efficiently as MLS), relay offers and acceptances and that is it!! Their main role is chief crossers of fingers that the transaction happens to complete. We’ve been telling people here that from viewing the house in Austin to you getting the keys took a whisker over two weeks and they are absolutely amazed.

From a buying point of view;
You see a house advertised that you like the look of. You approach the SELLING agent directly, arrange a viewing, maybe make an offer, the buyer accepts, you advise YOUR lawyer and mortgage company who arrange the inspection. The agent has no liability beyond not misrepresenting the house in the advertising. That is it!

In the case of {house purchased in Austin} we would have gone directly to the sellers agent, asked him relevant questions and negotiations would have been between him & us. Excuse me Mr Selling Agent is this house in a good area & likely to appreciate? Lambs to the slaughter!

Make an offer on a house you want to buy. Pay the mortgage company for the inspection (+/- $600) and lawyers for preliminary land searches etc (say another $600). Seller decides not to sell because the right stars are not in alignment, or more likely he receives a better offer six weeks into the process. No problem! They can pull out with no penalty. Same with buyers. Make an offer. No obligation to complete until you exchange contracts which is usually just before completion and long after inspection and lawyer’s costs have been incurred.

You know how you took us around houses for the day, and then Bridget around some more the next day? Its not going to happen here. You are absolutely on your own in the UK. You scour the property ads until you see something you like. If a house is on the market for say £300k and is only worth £260k but the mortgage company’s valuer states that is worth at least what you want to borrow that’s fine and no one will tell you – it’s up to you to suss out the deal. Buying in a street next to crack dealer’s row (in an area that you don’t know) but house “values up” ok? NO ONE will tell you. NO ONE is acting for you – the buyer – other than your lawyer who is only concerned as to title, access and land rights etc.

In a nutshell sellers, and, to a larger extent, buyers are supposed to become experts in property values and all factors affecting them.

There were houses that you steered us clear of when we were looking. In the UK the buyer does not have someone to do that.

A case in point:
We are selling our house here. A week or so before leaving for Austin we accepted an offer of $500k. The agent told us that the buyer had accepted an offer on their own house, was desperate to buy, their buyer had booked the inspection, and they expected the inspection of our house to occur swiftly. Four weeks later we find out that our buyer’s buyer(!) was having trouble getting approved for a mortgage and had certainly arranged no inspection. Absolutely nothing had happened to progress the sale of our house in four weeks. In the meantime, as our house was ‘under offer’ no further viewings have been arranged.

Lawyers play a huge part in real estate transactions in the UK. One set of lawyers for the buyers, one for the sellers. We are also selling an apartment here to sitting tennants. No estate agents involved.

Negotiated between ourselves with the buyers pre-approved for their mortgage. Couldn’t be more straightforward? Let’s see hmmm, five or six weeks in and due to complete who knows when. All down to lawyers asking questions about the most obscure things for fear of getting sued and their liability insurance premiums increasing. Let lawyers do lawyering, and let real estate experts ie. Title companies take care of real estate. We will spend somewhere around $2,500 in lawyers fees in cashing these properties. Assuming that our buyers will do the same, that’s $5k for participants in the transaction who have no expert knowledge of the real estate market.

I’m quite sure that the US system has its problems. Buying a home is an emotional process and one can become very critical when things don’t go quite to plan. But from a buying point of view the mere fact that someone is fighting your corner and giving you advice dissipates the fear that you are making a bad bargain, buying the wrong house, in the wrong place. I suspect that we struck very lucky meeting you & Sylvia and that not all buyer’s agents have the professionalism, knowledge and expertise that you clearly possess, but even having a rookie buyer’s agent on your side is an improvement on relying entirely on one’s own skill with the biggest ticket purchase you will ever make.

Although it was a wee bit stressful in the last couple of days I’ve got to say that you made the whole process really enjoyable.

I hope these ramblings give you a thread for your blog. If there is anything you wish to clarify please ask away!

Best wishes to Sylvia & the girls.

Kind regards

13 thoughts on “Buying and Selling Real Estate in the UK vs. Austin TX”

  1. Well, I don’t know UK that well but my impression is that in UK people tend to move much less than we are here. We buy and sell our homes every 3-5 years. I suspect that they only buy or sell a real property every 30 years or so. On top of that, the society in England is much much more stratified than that of here. In other words, the middle class is much smaller and a good chunk of regular wage earning population (like the middle class here) are living in heavily subsidized housing (kinda like governmental homes). They don’t own those homes but they can live in them as long as they want. So the overall importance of needing a very organized and efficient residential real estate transactions are relatively less than it is here.

    To sum it up, most of us, who make anywhere between $40,000 to $100,000 annually would not be able to purchase a home there in UK anyways. Those who can afford them, are much wealthier than the upper middle class, and they don’t really care about the distinction between 1% to 6% after all.

  2. Oh, I am very interested in learning how your clients thought on the comparison of health care system between UK and US. I wonder if they are amazed that it cost something like $20,000 to just get their appendix removed where it’s free in England… What about hip replacement?

  3. When I was in the USAF I bought and sold a home in the UK. Sylvia is very correct, things are different in the UK. Offers mean essentially nothing, either party can back out at any time. They have a word for the very common situation where a seller backs out of a deal in favor of another bidder, ‘gazomping’, as in “I was gazomped out of that house”.

    Agent commissions are only 1-2%. There didn’t seem to be an MLS, and most people listed their house with many agents, you’d see a dozen different for sale signs from different agents on one house.

    ‘Solicitors’, i.e. lawyers, do indeed handle the actual closing.

    Water is flat rate, but you pay extra for an outside hose bib (which few houses even have). British plumbing is 100 years behind that found in Texas.

    Still, I really enjoyed my time in the UK and would recommend that anyone who has the chance to work in UK to give it a try.

  4. I lived in the UK for a year and rented a house. It was a very difficult transaction and necessitated hiring an estate agent who would call all of the other estate agents in town and ask if they had a listing that came close to matching the description of the property we were looking for (size, price, location, etc.). Viewing the property always required the presence of both the property owner or manager, the listing agent, as well as me and my agent. Not only is there no MLS, there is no lock box system, either. Purchasing property is much greater in complexity. I was amazed to learn that even if your offer on a property is accepted the seller may decide to accept a greater offer anytime before closing.

    Sina, your guesses about the needs of people in the UK are way off. These days, their “middle class” is just as big as it is here, if not larger. They like to move just as much as we do but their antiquated system of handling real property transactions provides a serious disincentive. Also, and way off topic, while I’m not opposed to some sort of national insurance program, the UK’s system is one of the worst.

  5. Doug,

    Maybe you are right, their real estate system is not as efficient as the one run by NAR. I never disputed that. I guess I will have to go there and observe before I make my next comment on their society.

    I did not make any statement about how superior of UK’s national health care system compare to others like Canada, Germany, or, Cuba. I was just saying, in terms of efficiency, the health care system in America is getting out of control. Nor is it in any shape and form “efficient”.

    So which society you prefer to live in? One that you constantly worry about whether you are going to be laid off and your retirement might not have enough money to support your current lifestyle, or the other that have a obsolete real estate system and 17% sales tax?

  6. Sina, the British have a substantial problem with their pension system. Future retirees are in jeopardy there, as well as here. But I certainly agree with you that our system is far from ideal.

  7. As much as I enjoyed my time in the UK, and as much as I respect my British friends and colleuges, there are logical reasons why many more Brits emmigate to the US as compared to Americans emmigrating to the UK.

  8. I asked the folks I helped relocate to Austin from London what their UK friends thought about the move. They indicated that their UK friends were envious of the move and wished they could come here also. I’m not sure what all of the factors are surrounding that, and it certainly can’t be said that it represents the mood of all of the UK, but in general the US is seen as the place where better opportunities can be found no matter where else in the world one lives.


  9. I worked with British guy in Ottawa, Canada. He was saying that the quality of life in Canada is much better than in UK. He didn’t even consider going back after our company was shut down and we were let go. His words – “my unemployment insurance here in Canada is going to be somewhat equal to my full time salary in UK if you take cost of living into consideration”. We are in a high-tech field. At the same time he wasn’t really happy about health care and education systems in Canada favouring UK ones.

    I’ve met quite a few UK expats in Canada especially nurses and health-care workers

  10. Doug you are spot on in your comments as to the “middle class” in the UK and their propensity to move house (I should say that I am the author of the e-mail that Steve has posted herein).

    Sina, you make a valid point as to the affordability of homes in the UK. In many areas buying a home is beyond average income households. In terms of the healthcare, the state system; it (the NHS) waivers between first class and dreadful. Alas, your contributions to the NHS through taxes are the same whether you live near modern health facilities or a cash-strapped, waiting list ridden local health authority. The uptake of private healthcare insurance is increasing each year.

    The intended thrust of the e-mail is that the UK real estate system serves only to add wealth to lawyers and estate agents who add little to the transaction. We have just had a very pleasant experience buying in Austin through Steve and Sylvia’s assistance which brought home how poorly the UK system serves buyers & sellers. Why are we moving to Austin? Myriad small reasons, but it just seems like a nice place to live is what it boils down to. Nothing more complicated than that.

  11. Dear Simon and family,

    Austin is indeed a wonderful place to live. Welcome. I hope you enjoy your time here.

    Just remember, we pay for our beautiful winters by enduring June-September.


  12. As a UK expat I just have to comment on Sina’s posting. There is no subsidised housing in the way you refer, especially at what would be called middle class. There continue to be houses made available to low income and unemployed through council and charity schemes, the waiting list is long and the family needs to be in extreme financial need, usually at or below the poverty line. These properties are subsidised rentals owned by the local governing body (think county administration) or charity. Over time these properties may be made available for purchase to the sitting tenant, usually at a price below market value. This is intended to enable them access to the housing ladder. During the eighties and early nineties many councils sold a lot of their properties and the tenants did well out of this, but those that bought still needed to meet the financial scoring and credit worthiness to afford a mortgage, many could due to the initial chance the subsidised rental scheme gave them in the first place.

    Simon, welcome to Austin, it’s a great town, completely agree with your comments about the buying/selling system in the UK. The difference of having someone looking after your interests is like night and day and greatly increases your confidence. Check out Fado’s or the Ginger Man when you find yourself craving the pub 🙂

    Cheers, Bruce

  13. I have been living in austin for almost a year…an amazing city …but I am thinking about moving to the uk…moving to london…I am an actor and trying to get into drama school…can anyone give me there thoughts on a comparison


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