Interview with Duncan Samuel, Managing Director of Gazeal
Duncan Samuel is Managing Director and founder of Gazeal, a new service, launched in April, which promises to end gazumping forever. He told Jane Common at Today’s Conveyancer how Gazeal works – and how it could revolutionise house buying and selling…
In a nutshell, what is Gazeal – how does it work?
“Gazeal binds buyers and sellers when they are ready to agree a deal – it puts the title of the property into Escrow, pending exchange. So what it does is provide certainty. At the moment people often get to the point of exchange on an absolute knife-edge of anxiety and, with Gazeal, we can change that.”
What’s your background Duncan? How did you come up with the idea of Gazeal?
“I’m a solicitor – I was admitted to the roll in December 1992 mainly doing litigation. Then in 2003 I set up Convex Conveyancing, which was one of the first online conveyancing models. But, when 2008 came along, there was very little work in the conveyancing market so I went into renewables – solar installations, rooftop leasing and the like – and a lot of that work was around shortening the period before the funder could go ahead and install on a domestic rooftop without being at risk on title. In other words bringing the time when the parties could deal with certainty forward as far as possible – and that gave me the idea for Gazeal.”
Are you marketing it to consumers?
“Ultimately, yes but at the moment we are focussing on agents and solicitors – the agents are the ones who have the initial client experience but obviously the solicitor’s role is integral to the process too. The last thing we want is to make solicitors’ lives more difficult or ask them to do anything differently so we’re very much involving them in the conversation. And the take-up, so far, has been very good indeed – we’ve had a great reaction from agents and solicitors.
“As for the B2C side of it, even though we haven’t being marketing it to the public yet we have had phone calls and emails from people telling us they have been gazumped and requesting our help. So, even without us promoting Gazeal, consumers are coming to us.”
How have you been marketing this to estate agents?
“Largely through personal contacts – influencers in the industry – and PR, and the response has been positive. The agent can’t lose, really.”
And how are solicitors responding?
“Solicitors are universally positive but talking to solicitors takes an awful lot longer than talking to estate agents – solicitors quite rightly want to get right under the bonnet of Gazeal and see all the workings before they put their name to it. And, of course, a lot of law firms are run by committee so that makes for lengthier conversations too. But, while the discussions are taking longer, they are going well. Nobody has looked at Gazeal and given a negative response – nobody has told me it’s not going to work.
“From a conveyancing solicitor’s point of view, I think Gazeal has the potential to take a lot of the misery out of the house buying and selling process and that will allow them to provide a good professional service without being stressed out because of the precariousness of it all. At the moment the client doesn’t appreciate what the solicitor does because they’re so concerned about losing the house – they don’t understand how difficult the process is from the conveyancer’s perspective. And then, if it goes wrong and they’re stuck in a Travelodge with a removal van parked outside, the poor solicitor is blamed, even though they have probably acted perfectly professionally and correctly. Gazeal will make conveyancers’ lives easier, I am certain.”
We covered Gazeal in Today’s Conveyancer when it launched in April and from the tone of the comments on the piece, some of our readers were concerned that effectively it just confirms the title. How would you answer that?
“What we are selling here is a process and, because we have been able to establish a process that allows there to be an objective standard of good and marketable title which is assessed by a third party expert in property and law, the point of certainty can be brought forward from exchange as far forwards as the buyer and seller want – to offer if necessary.
“It’s important to define what we mean by title – I’m talking about a conveyancer’s definition of title rather than the legal definition. So essentially what we mean when we talk about a good and marketable title comes down to this: is there anything to do with the title that would affect the position of an independent buyer to purchase the property or of an independent mortgage lender to lend against the property? And that obviously encompasses much more than just the quality of the Land Registry title so, for example, if there were issues over ownership of the drains or planning permission applications, they would be included.
“And we have a complete legal indemnity policy to cover those things off, so if it turned out that there is a problem with planning permission for a conservatory that was put up in the 1970s then there is a cheap policy that takes care of that.
“Obviously there will be things that can’t be covered in this way – discovering HS2 is going to be driven through the back garden, for example, and in that circumstance we would issue a defective title notice, meaning the sale couldn’t be Gazealed and both parties would walk away without obligation or payment.”
So if I was selling my house and I used Gazeal and then changed my mind or got a better offer – what penalty would there be?
“You would find yourself in breach of contract in exactly the same way you would after exchange of contract. I know you’re going to get lots of comments under this article pointing out the difference between breach of the Gazeal Agreement and breach of a contract for the transfer of land but essentially, for practical purposes, it is the same – you’d be in breach of contract and liable for damages. What we are selling, with Gazeal, is certainty but the flipside of certainty is that both parties are bound. And if the buyer decides he wants to change his mind – well, I’m sorry but you’ve signed an agreement and you’re bound by that.”
What’s the cost?
“The buyer pays £250 and the seller pays £250. And what they get for that is certainty that as soon as they have agreed – or Gazealed – the deal it’s not going to fall out of bed for any reason.
“So the buyer, having paid their £250, can start preparing for the move – be that by resigning from a job, accepting a new job or getting places for the children at school – and can also spend their search fees with confidence knowing they’re not going to lose that money.
“From the seller’s point of view no money is paid until completion – and then only if they have used the Gazeal process to sell the property. So some properties might be listed as Gazeal-linked, but then, for whatever reason, that’s not the way that the sale pans out and in that case the seller won’t be out of pocket.”
Is the technology is easy to use?
“It’s only complex in the sense it has to coordinate several people – the buyer, the seller, the agent, the buyer’s solicitor, the seller’s solicitor and the mortgage broker – but, for each of those parties, it’s incredibly simple to use. Each person in that chain only has to do two things on the computer and there isn’t even anything to print off. So yes, the technology is very easy to use.”
Gazeal doesn’t deal with chains at the moment – might that change?
“Yes, we’re not yet in a position to deal with chains so at the moment we are targeting developers and property investors. But we do know exactly how to work with chains – the science is there – so it’s not a technical question but a matter of market penetration. And when the market penetration is there – and I’m confident that will be soon – using Gazeal with chains will work perfectly.”
There’s nothing else like it on the market yet it sounds such a simple idea – why hasn’t a product like this been around for ages?
“No, there is nothing else like it on the market. I hope it’s like a lot of great ideas – one of those things that seem so simple that you wonder why nobody else thought of it before!”
Do you think everyone will start copying Gazeal now?
“It takes a while to bring a product like this to market. There are compliance issues around the SRA, FCA, CLC, CML and consumer protection legislation and regulation that all have to be ticked off; an underwriter has to understand the product and be happy with the level of risk; the technology has taken years to develop, through making our old Convex systems relevant to the sales and purchase market and then there’s been finding investment. I’ve done my fair share of standing in front of people talking about Gazeal! So no – nobody could copy it overnight.”
For more information about Gazeal, log on to www.gazeal.co.uk