Avoiding gazumping

[Newtomarket]

Is there an agreement that I can sign with the vendor to stop gazumping?

Also for best and final offers is there an agreement that can be signed to make it binding?

[that1970shouse]

Binding on whom?

[Lightsabre]

I don't think so.

[Newtomarket]

On buyer and seller. Is it the case that this is all on trust that the seller wouldn’t stick to the agreed offer? Is there anyway of protecting myself from agreeing an offer and then losing out down the line because I’m gazumped?

[UsernameN0Tavailable]

No. Presuming were talking about the english system, there is nothing you can do to legally bind a sale before exchanging contracts.

Gazumping is something that is wholly out of your control as a buyer because it is down to the vendor to decide who they sell to.

[InfiniteSheldon]

No, make a fair offer and don't piss them off with stupid requests or time wasting on line solicitors. We've accepted higher offers when buyers have fannied around.

[BlackberrySky]

No, that is what exchange of contracts is for. You can't make it binding before that.

[Newtomarket]

I’m in England and trying to understand how it works here. I have no intention to mess them around. I’m worried that because of few properties on the market and with many people fighting for the house, someone may gazump me even though the vendor agreed my offer. A vendor with no chain and no pressure could be enticed away with more money. Why is this a good system? It seems unfair.

[YellowNotRed]

It really doesn't happen like it used to, EAs are keen to avoid it now.

The best thing you can do is when you do make an offer, make sure you're in a strong position. Are you proceedable?

[Thingsthatgo]

Whenever you make an offer you should always add that, if accepted, it is on the condition that the property is taken off the market immediately and no one else is shown around the property.
That way, is anyone phones that EA to enquire about the property, they should be told it’s off the market.
A vendor is only likely to agree to this if you are proceedable.

[Newtomarket]

I am proceedable. It just seems to me it is risky that you agree something and down the road you can be devastated by a gazump. I am feeling stressed about that.

[anuffername]

If such a thing existed then surely everyone would do it?

[Shelley54]

@Newtomarket

I am proceedable. It just seems to me it is risky that you agree something and down the road you can be devastated by a gazump. I am feeling stressed about that.

Yup. That's how it all works. Everyone feels the same.

[Wildwood6]

Yes, the system in England is a complete nightmare. Until you've exchanged contracts I'm not sure what more you could do. The only thing I can suggest is to push to exchange as quickly as is reasonably possible, even if you don't actually complete the purchase for some time. Make all the chasing phone calls to the solicitors, etc if things seem to be dragging, and make sure your survey is completed as soon as possible. We've gone from viewing a property to completing in 5 weeks so it is possible to push things through relatively quickly if you become a bit of a squeaky wheel. Also @Thingsthatgo advice to stipulate that your offer is conditional on the property coming off the market and no-one else is shown the property is very sound. According to this website you can take out insurance against gazumping: hoa.org.uk/advice/guides-for-homeowners/i-am-buying/what-is-gazumping-how-avoid-it/. It might be worth considering if this is a particular concern? Other than that, perhaps look at new builds where I imagine it would be less likely?

[Pootles34]

No and I don't understand how it would work - you could agree to pay bucketloads for a house you think is perfect, and only find out at survey point that the roof is about to fall in. Why would you legally agree to buy a house before doing all your searches etc?

[Pipandmum]

There's nothing in place in this country - it's an awful system. If they did the US system, offers are binding and are signed. You can offer with contingencies (mortgage offer, inspection etc), and you state that. But it's not uncommon to offer with none. You also stipulate when you will complete: for example a 30 or 60 day closing. And put a bit of cash down immediately as a good will gesture. All this means you are usually 'sold' when you accept an offer, not this ridiculous time of anxiety wondering if your seller or buyer will pull out for any reason with no consequences.

[Newtomarket]

I take your point Pootles but it must be possible to design an agreement whereby the breaking on the contract is dependent on legitimate reasons and not something about getting a better offer after the agreement is made. Agreements can be broken for good reasons especially unforeseen solid ones but not for just people changing their minds on a whim and fancy or because someone gives a promise of more money.

I’m happy in a way to know others worry about this. I was thinking that I must be misunderstanding the system here.

[Newtomarket]

Pipandmum that is my experience. It is a different system here and it must be devastating for many people. It is unnecessary especially as the process is already stressful in itself.

[Bluntness100]

Define legitimate reasons?

Exchange is the point you do this, you can ask your solicitor to exchange as soon as possible and you will take the risk if he finds anything in searches.

Personally I just always made it the condition it came off the market if my offer was accepted.

[dancingshoex]

Yes. It's called an option agreement or an option contract. It will cost you some money but a good solicitor (perhaps with a corporate law background, not just conveyancing) could draft it. Not common but technically feasible.

[YellowNotRed]

Just ensure the house comes off the market, no more viewings are accepted and that's the best you can hope for really. It's seen as bad form to gazump now, I've been refused viewings even when a house is under offer, never mind offer accepted!

I agree the process IS inherantly stressful but I have learnt to try not to worry about things out of my control.

[ethelredonagoodday]

Yep it's hugely stressful, and a crap system - there's a reason why moving house is considered one of the most challenging life events!

We are about 3 weeks down the line from accepting our offer and instructing solicitors, and just have everything crossed that we get to exchange promptly with no hiccups.

[mumsy27]

you might feel "legitimate" reason for you as buyer to pull out or you did find another property,changed mind...etc, just by giving any small reason from the search or enquiries and nothing covers the vendor for that.

hence, exchange is the point where the contract is legally binding for both parties

[Newtomarket]

Clauses in contracts are not unusual. It is the norm to have clauses that allow people to break agreements for legitimate reasons as defined by the contract terms. In the property market it is done elsewhere but I don’t know what England is different.

[peteneras]

Fact of the matter is, nothing is finalised until the contract is signed by both parties. When I bought my property a few years ago, I told them right from the first minute that I was very keen and in order not to waste any time, I agreed to the FULL asking price on one condition that no more viewings from that minute on. They gave a verbal agreement and we shook hands. I kept them updated constantly and even though I was assured and reassured that the property was going to me, I still felt insecure. Then I was asked if I was interested in buying the contents of the house for £1000 I agreed instantly and paid cash on the spot. This is to further secure the sale/transaction even though I wanted nothing from the house (and spent the next few years getting rid of them). Oh, and every now and then I wined and dined the vendor until the contract was signed, sealed and delivered. A small price to pay to avoid being gazumped was the philosophy behind.

[Newcornishmama]

You sound like you would like an exclusivity agreement. Unusual in residential transactions but not unheard of. Speak to your solicitor.