3.0 Literature Review
The literature review will form the foundation on which the research will be built (Saunders et al, 2003). The author felt it to be most appropriate to conduct the majority of research using the Internet, as this is the intended medium for the proposed business. By using general and meta search engines, it has been possible to find other websites, which are operating under similar principles, i.e. to make house buying simpler and easier for consumers. It has also been possible to discover the changes being implemented by the UK Government, to make the process easier and less stressful.
One website which was found to be of considerable interest is . This website is an independent on-line directory of removals, storage and moving companies. It also provides a comprehensive checklist for consumers, containing all the minor details, which usually cause the biggest problems. In comparison to the proposed business, it provides no assistance beyond that of periphery services, although does hold a database of recommended removal and storage companies for nationwide use.
Another website of interest is . This website is run by estate agents, with many years of 'high street estate agency' experience. Their philosophy is to take the latest technology and combine it with the best people to offer a superior full estate agency service. By utilising the Internet to its potential, costs are significantly lowered, and these savings can be passed back to the consumer. The commission charges are based on sales or lease agreements, and range from 0.5% to 5% of the total cost of sale. In relation to the research topic, this website doesn’t provide any advice or guidance for consumers, and it’s property database only covers the London area. If this service were to be expanded nationally, the impact on high street estate agents would be vast, and it could prompt the lowering of extreme charges, which consumers currently face when using a high street agent.
The Homes Bill 2001 is a policy, which has been devised by the Government to simplify the procedure of buying and selling houses within Britain. Legislation to reform the home buying and selling process was introduced in the House of Commons on 12 December 2000. The Homes Bill proposed two reforms - one to improve the efficiency of the home buying and selling process and the other to help homeless people. It was one of a number of items of legislation unable to complete its passage through Parliament, before Parliament was dissolved for the General Election. The necessary legislation will be reintroduced as soon as Parliamentary time allows. In the meantime, the Government are pressing ahead, in consultation with consumer representatives and the professional bodies, with developing the detailed contents of the ‘seller’s pack’ to prepare the ground for smooth implementation across England and Wales. As part of the commitment to improve the home buying and selling process, a bill to modernise the land registration system was introduced into the House of Lords on 21 June 2001. This will provide greater security of title and open the way for electronic conveyancing.
The current system is extremely inefficient and wasteful and does not look after the best interest of buyers or sellers. Delays in the present system can encourage gazumping (where an offer is accepted and then rejected by the seller in favour of a higher bid by another buyer) and other problems. By providing information up front it will make the process faster, more transparent and consumer friendly. This means less risk of transactions collapsing, less wasted expenditure and earlier certainty for everyone. The Bill would have required sellers, or their agents, of residential properties in England and Wales to put together a seller’s pack. This would include standard documents and information for prospective buyers. Sellers would have to do this before they put their property on the market. The seller’s pack stipulates that seller’s must produce - evidence of title; replies to standard preliminary enquiries made on behalf of buyers; copies of any planning, listed building and building regulations consents and approvals; for new properties, copies of warranties and guarantees; any guarantees for work carried out on the property; a draft contract; replies to searches made of the local council; and a home condition report based on a professional survey of the property, including an energy efficiency assessment.
As well as this, the Government have also proposed to improve the system further by - making better use of current and future technology; insisting on better preparation by buyer’s (e.g. obtaining ‘in principle’ mortgage offers before making an offer on a property); action by lenders to provide title deeds quickly and to examine the scope for developing ‘chain-breaking’ loans (which enable people to buy a new home before they have sold their existing one) which would be suitable to a wider range of people than current bridging loans, and action by insurers to develop further and market more widely insurance to protect buyers and sellers from gazumping and other problems.
Although the introduction of the Homes Bill has been delayed, it hasn’t stopped other companies using a similar concept to create business. SecureSALE™ offers buyers and sellers the opportunity to complete transactions efficiently by requiring both parties to purchase a SecureSALE information pack. The seller pays to have the pack prepared, and the buyer pays to receive it. A buyer who wants to make an offer must purchase the SecureSALE pack and study its contents before their offer will be considered. The SecureSALE pack includes:
- Full property description
- An independent Pre-sales Survey
- A copy of the title deeds
- Land Registry and Local Authority searches
- Draft contract, including replies to standard enquiries
- Copies of guarantees, warranties, planning permissions, etc.
- Quotes for the cost of any work recommended in the survey
All negotiations in relation to the purchase can occur at the offer stage, as there is nothing that will subsequently come to light about the property that affects the price a buyer is willing to pay. Once an offer has been accepted on a SecureSALE property, there is effectively nothing to delay exchange and completion of contracts. By changing the order of the house buying and selling process SecureSALE provides all the information about a property up front, rather than after an offer has been accepted. This means complete transparency and a greater level of commitment at a far earlier stage of the house buying process than is currently possible.
4.0 Methodology
This section aims to explain the type of research methods that would be used for the analysis of the proposed company. The results of the research would indicate the range of services that need to be offered, and the suitability of these services for the target market. Moore (2000) explains how the methods used will be influenced by constraints, such as time and money. It is important to consider all the methods available and choose a method that is most likely to achieve the objective of the research.
4.1 Primary and Secondary Research
Primary data is information that is new or hasn’t been collected before. Secondary data is information that has been collected earlier, by some other person. (Saunders et al., 1997) For the purpose of determining consumer needs, primary research will be essential in this study, and will focus on establishing basic principles for the operation of the proposed company. It will also uncover attitudes towards the current processes that are used.
Secondary research will also be important, in order to establish the current options for consumers, and to discover any relevant studies that have been carried out in the past.
4.2 Qualitative and Quantitative Research
The table below outlines the differences between qualitative and quantitative data:
(Dey (1993); Healey and Rawlinson (1994), cited in Saunders et al (2003))
For this study, the author deems it most appropriate to use qualitative research methods, as the aim is to discover attitudes and opinions of potential consumers of the proposed business. A quantitative study would be inappropriate, as numbers cannot determine the required outcome from the research objectives.
4.3 Sampling
The proposed target market is first time buyers, who may require additional advice and guidance, as they have no experience in the housing market. The proposed research aims to determine the needs and concerns of these buyers. In order to discover their needs, it would be useful to conduct research with consumers who have recently bought a house, in order to find out the problems with the current system. By having these consumers participate in the research, it will be possible to establish the popularity of the proposed changes, and their opinion of the effect it may have on first time buyers. If the proposed changes are seen to benefit the consumer, it will be recommended that these changes are upheld and used as standard practice for the proposed company.
4.4 Interviews
An interview can be defined as a purposeful discussion between two or more people (Kahn and Cannell, 1957, cited in Saunders et al, 2003). There are several types of interviews, including structured, semi-structured and unstructured. Structured interviews have the advantage of all respondents being asked the same set of questions, which makes analysis of the results easier in terms of comparison and spotting trends. Semi-structured interviews are non-standardised, which indicates that the researcher may simply be using a list of themes and questions that need to be covered, but each interview is different, and will cover different topics, dependant on the variation in respondents. Unstructured interviews are informal and give the interviewer the freedom to discuss any topic, while keeping the research objective the main focus. The interviewee has the freedom to discuss their experiences without being restrained by pre-set questions.
The author believes that the most effective interview technique for this type of research is to use structured interviews, with respondents that can be recruited to fit a set quota, which stipulates the age, sex and socio-economic group of each. An interviewer-administered questionnaire is thought to be preferable to a self-administered questionnaire, because of the nature of the questions, which will require the interviewer to record verbatim. A fixed quota requires the interviewer to recruit a preset group of people, and other quota requirements can be set to ensure that the interviewees are in a position to discuss the main topic (i.e. a condition of fulfilling the quota would be having purchased a house within a set time frame).
The topics to cover during the interviews could include the interviewee’s experiences with their mortgage provider and estate agent during the process of buying their house; how they think the process could be improved, and a list of suggestions on how to improve the system, for respondents to select for themselves. By using a combination of open and closed questions, it allows personal opinions to be recorded, and specific attributes to be measured (e.g. the level of satisfaction of service that the mortgage provider offered, using the likert scale).
5.0 Limitations of Methodology
It has to be noted that the law restricts the range of services that could potentially be offered by the proposed company, and regulations prohibit advising consumers without appropriate qualifications.
New services that could be offered, such as the arrangement of changing the consumer’s address with suppliers to the home, are restricted because of company policy to not discuss account details with anyone other than the account holder. This limits the effect the proposed company can have on the consumer, as far as reducing the stress caused by such minor details.
6.0 Summary
The proposal of making life easier for consumers can be fulfilled to a certain extent, and following the results of the impending research, it would be easier to determine the potential effect of these changes, and the impact they would have to the house buying experience as a whole. The research is intended to discover the needs and demands of consumers. It is anticipated that some of the following attributes may be suitable for the proposed company to offer:
- Arrange to have the car serviced.
- Notify the bank of change of address
- If appropriate, inform children’s school of leaving dates, and advise new school of the intended start date.
- Inform the Inland Revenue of change of address using the reference number on pay slips/P60.
- Contact the insurance broker for life, motor, medical and contents. When contacting the house contents insurers, check with them to see what cover is available regarding moving house, it may be that there is no need to take out extra cover, it may already be part of the existing policy.
- Doctor, Dentist & Opticians - De-register if moving out of the local area. Liaise with hospital if regular treatment is required
- TV Licence - fill in the change of address part of your existing licence.
- Council Tax - Notify the relevant authorities in both the current area and the area consumers are moving to.
- Electricity - give at least 48 hours notice for change of address to take effect.
- Gas - Contact existing and new gas companies. Advise them of new address and date of removal. Give at least 48 hours notice.
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Water. At least 48 hours notice is required by both your existing and your new authority to arrange for disconnection and re-connection of supply.
- Mail can be re-directed by the Post Office. This can only be done over the counter; they require seven days notice.
Additional services to be offered would be identified using the research as outlined in section 4.0. The element of aftercare needs to be considered, as any action recommended by the seller should be undertaken by the buyer, after the sale has completed, e.g. if plumbing is not up to standard, and the buyer has been informed of this, it is their responsibility to fix the problem when the property transfers hands. The proposed service is supposed to make life easier on its customers, by doing all the hard work for them. This may be an easier task once government legislation has passed stipulating the necessity for information to be provided by both parties before offers are made on the property. Changes in the overall process will eventually change the outcome and impact on consumers, but until then, consumers will simply have to cope.