To think that gazumping should be illegal

[ReallyTired]

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.

This reminds me of my friends PIL. He decided they were moving and she went along with it then when they went to sign the contracts she said that actually she had never wanted to move and didnt want to sign.

She, to this day, doesnt see the issue

We're trying to buy a house in the US and it is under contract, we then had 10 days to do surveys and either pull out or adjust the price, then a further 11 days for the finance. We paid 100 option fee to the sellers, if we pull out they keep that. They can't sell to anyone else, even a higher offer as we have a contract to buy. It seems like a good system.

I do think in the Uk if the seller pulls out, they should be up for any survey fees etc... Already spent by the buyer, surely this can be written into the offer though. For them if someone offered 20k more on the house, they'd probably be happy to throw 2k at the gazumped buyer.

In Canada, we have a nice sensible system, similar to the US, I believe.

An accepted offer, always with a deposit (usually $1000 or so), is binding. Very often the purchaser puts in conditions, such as survey, financing, etc, and has 'x' days to satisfy the conditions.

If the vendor receives another offer, the first purchaser has a few days to waive the conditions, otherwise the second purchaser gets the deal.

My son caused the solicitor to work some overtime, several years ago... he made an unconditional offer on Saturday to close the following Friday! They got it done.

Yes, a £500 deposit is an excellent idea. That way, when someone offers you £10,000 more than you were going to get you would turn around and say "very tempting, but I don't want to lose my £500 deposit".

Sorry OP, a sale becomes legally binding exactly when it becomes legally binding. Not before.

In principle it's a good idea, but not all situations are that simple.

Last year I put in an offer on a house, the seller was planning to move into renting, so no chain and wanted a quick 4 week completion.

A week before the estimated completion date the seller changed her mind and decided she wanted to buy, so halted the sale while she looked for a house, when she found one it was part of a chain of six, because of delays three more estimated compilation dates came and went, then someone in the chain died, but the buyer of that house still wanted it, so was trying to make arrangements with their family.
By this point it had been four months since our first completion date.
Another month went by and the amount of money it had cost us to that point had tripled.

There was still no end in sight and so we decided to cut our losses and walk away.

The amount of abuse that we received from the estate agent and the seller was ridiculous.

Yes it was annoying for the seller but we entered into the deal as a no chain 4 week completion deal.
We ended up waiting for five months with no definite date in sight and spending far more as a result.
By the end I was glad to walk away.

I don't think it would be fair for someone to be penalised for walking away from a situation like that.

We were gazumped whilst on holiday in Japan. It was 2006 and UK mobiles didn't work out there so we didn't know until we got home. Unfortunately we had instructed our solicitors to do all the ground work whilst we were away so lost all that money. The house we were buying was nearer the station we commuted from so we had to pass it twice a day on our way to and from work, which upset me hugely. I had a huge sense of satisfaction though when we passed it one day and saw their front porch had collapsed. Karma at its finest I thought.
We moved into a much nicer house and area and are still here now very happily.

I would support a system whereby gazumping was impossible.

However there HAS to be the possibility for people to pull out of a transaction. Situations can change so quickly and sometimes people on both sides have to pull out for genuine reasons. There shouldn't be any penalty for that.