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AIBU?

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Original poster

To think that gazumping should be illegal

32 replies

ReallyTired · 18/10/2013 21:02

Once a buyer and seller agree to property sale I feel it should be legally binding. If either party decides or needs to pull out then I feel they should pay compensation to other party. It is wrong that a seller can accept a slighly larger offer just before exchange day without compensating the failed buyer for legal costs.

Often the victims of guzumping are first time buyers who are struggling to get on the property ladder.

OP posts:
ipadquietly · 18/10/2013 21:06

I agree. And I HOPE HOPE HOPE that I won't be gazumped on my dream house!!!!!!!!!!!

(which is very cheap, I fear...)

Bowlersarm · 18/10/2013 21:08

Yep, equally wrong for the purchaser to reduce their offer for no reason just before exchange.

bimbabirba · 18/10/2013 21:10

It's not as easy as that. Buying a house is not on par with buying a new dress. There are lots of things that need to be ascertained before anyone with a little sense would wan to commit to buying a house.The transaction is binding after exchange I.e. when searches, survey, financial checks, legal enquiries have been satisfied.

Bowlersarm · 18/10/2013 21:11

Yes bimbaburba but that's not what the OP means, I don't think.

Do you want a system more like the Scottish system OP?

CeliaLytton · 18/10/2013 21:12

Morally wrong to take a higher offer once you have accepted one. But as a seller who had two people back out late in the day (one a week before exchange was due to take place) and having lost money on surveys for houses that we then did not get, prt of me thinks that it is every woman for herself!

Was it a really lovely house OP? Sorry this has happened to you.

sicutlilium · 18/10/2013 21:18

Nothing, other than convention, stops you agreeing to use the Scottish system in England - there is complete freedom of contract. People don't, because they like to maximise their flexibility and minimise their costs and not pay out for 'wasted' surveys, as happens in Scotland.

Swimmyfishy · 18/10/2013 21:58

I agree and think its disgusting behaviour. I am well aware and understand people want the best price for their propety. When i was in the process of buting my current home the vendors put the property back on the market aftet agreeing to sell in the hope of a ' cash buyer' coming in at the last moment. Ok , it worked out but was a 10 month headache for a chain involving 3 sales. Unfair once you have paid for searches etc,. Agree that the uk needs to look at the way houses are sold so people dobt lose out because of others selfishness.

Swimmyfishy · 18/10/2013 21:59

Typos galore sorry!

Caitlin17 · 18/10/2013 22:11

This is all old news. You could adopt the Scottish system, it's been discussed often enough, but I expect the fact the parties are committed at a much earlier stage and you do pay damages if you fail to complete got it the thumbs down.

Basic domestic conveyancing is not something I do but the last time it was for a particular client selling in Scotland and buying in England. I only acted in the Scottish side of it, but one thing that astonished my client and me is that in Scotland the land registry searches and the local authority searches are provided by the seller at the seller's cost but she had to get her own in England. The searches are from official sources so can be trusted no matter who provides them.

She also commented the fees in the Scottish side of it were much higher than the English side of it, but I'd done far more and taken the hassle off her compared to what the English solicitor did.

Musicaltheatremum · 18/10/2013 22:16

I think the problem is that you may put in an offer but the survey may be awful or other constraints may make the purchase impossible. There does need to be a point though when no one can pull out. In Scotland you can't pull out once missives are concluded. That used to take about 10 days when we bought 20 years ago but now takes longer. There was always the thought that in Scotland you couldn't pull out after an offer was accepted but you could until missives concluded it's just these take longer now.

Lamu · 18/10/2013 22:24

I have never understood why it takes so long to buy a house here. In some parts of the world you can purchase a house in 30 days, which would lessen the likelihood of guzumping or guzundering IMO.

We had an awful time trying to buy. The first house had issues which only became apparent upon survey. And it was clear the agents and the vendors had deliberately attempted to hide this. We threatened to sue and recovered our costs.

Second house we were less than a week to exchange and were guzumped. Lost out circa 2K.

Bathtimesoaker · 18/10/2013 22:32

After finding out that we had been gazumped on our first ever house whilst sitting in the solicitors waiting to exchange I wholeheartedly agree that something should be done. We lost a great deal of money on fees and surveys, we had to move into our parents house as we had already given notice on our rented property and also suffered with the mortgage company when we tried to purchase the house we now own. It's a horrible horrible system we have in buying and selling houses in this country

Original poster
ReallyTired · 18/10/2013 23:13

I have not been hit as badly as Bathtimesoaker, but we have been gazumped on a flat. We have lost around £800 because of being gazumped and thankfully we aren't facing being homeless.

When someone gazumps another buyer it can upset an entire chain. It doesn't just cause hardship to the buyer, but possibly affects the buyer's buyer.

I would like to see a two step exchange process. Prehaps we could have an engagement where the buyer and seller agree to compensate the let down party with £500 if they pull out and don't properly exchange.

OP posts:
sicutlilium · 18/10/2013 23:30

ReallyTired nothing stops you entering into such an arrangement. Whether it would be worth blowing the £500 to exit the contract would depend on what the gain was to you.

Original poster
ReallyTired · 18/10/2013 23:37

"ReallyTired nothing stops you entering into such an arrangement. "

Getting the seller to agree! At the moment the property market is on the side of the seller. I think that a two step exchange process would need to enshrined in law.

I think that people need the right to change their mind about selling/ selling property, but when someone changes their mind the other party is left with costs and inconvience. I feel that smallish desposit would allow buyer/ sellers flexibly to pull out in desperate situations and compenstate the let down party.

I don't want a scottish system of sealed bids where you have to do lots of surveys on a houses in the hope of getting one.

OP posts:
HardFacedCareeristBitchNigel · 18/10/2013 23:38

YANBU. Buying and selling property in this country is a farce.

FunnysInLaJardin · 18/10/2013 23:40

fine, make it illegal, and then follow it though the courts to enforce the 'breach'. It won't happen as it's too expensive

FunnysInLaJardin · 18/10/2013 23:41

mind you a small no refundable deposit would't go amiss on both sides

Original poster
ReallyTired · 18/10/2013 23:49

FunnysInLaJardin I agree with you that making gazumping illegal would be next to impossible to enforce. However having both the buyers and sellers puting a small desposit into an account would stop people mucking each other about.

Rather than preventing gazumping, prehaps its simpler to look at ways of compensating people. If a buyer pulls out at the last minute it can cause huge problems for the seller. A small desposit would protect both buyer and seller.

OP posts:
Financeprincess · 19/10/2013 00:02

I've never participated in gazumping. However, in a rising market (not a problem we have in the north just now, but it seems to be like that in the south east), would you effectively hand £10k, or £20k, to strangers, i.e. the people who made an offer that you accepted when the value of your house was lower? I wouldn't, if somebody came along with a better offer. Sorry if that's not what you wanted to hear, but that's why gazumping will always be a risk.

Original poster
ReallyTired · 19/10/2013 00:10

" I wouldn't, if somebody came along with a better offer. Sorry if that's not what you wanted to hear, but that's why gazumping will always be a risk."

If the seller decides to accept the better offer the day before exchange then I feel that a small desposit would help the failed buyer with costs. A small desposit on both sides gives the freedom to back out for whatever reason, but helps the other side to be a little bit less out of pocket.

OP posts:
TiredFeet · 19/10/2013 00:18

I would certainly think considerably less of a friend if they gazumped a buyer.

It might not technically be illegal but it is quite ghastly and greedy behaviour.

You accept an offer 'subject to contract' and that's what it should be, not 'subject to me ditching you at the last minute if a better offer comes along even though you will have spent a lot of money and time by that point'.

Whowouldfardelsbear · 19/10/2013 00:30

The system here in New Zealand is great. You put a conditional offer in and generally have a few days to go unconditional (to give tune for surveys etc and confirm finance). After you have gone unconditional the process moves very quickly and if you pull out you have to compensate the other party.

We were living in our house about fifteen days after making our offer. People here were gabberflasted when I told them it took 3 months to complete the sale of our house in the UK and the buyer could have pulled out at any time with no recompense.

Overall it was a much less stressful process over here.

itshotintexas · 19/10/2013 01:54

And in WA you make an offer with your terms and conditions ie meets inspections for termites etc and its binding. Cant pull out unless you compensate.

Bogeyface · 19/10/2013 02:07

I dont think the problem is gazumping as such, but the fact that it costs the buyer to get gazumped.

If sellers had to provide the survey and searches then it wouldnt rankle a gazumped buyer so much. Its the fact that you pay out potentially thousands (when you take into account conveyancing fees) for a house you dont end up owning that is the issue.

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