Gazumped on day of exchange

[Bushyandbright]

I'm writing this post on behalf of a friend who is distraught this evening. Her and her husband had their offer accepted on a house in January that had come back on the market following a collapse in a chain. An offer was made an accepted on their property too at the same time; their buyers are living with family and the house they were buying was empty, so a small chain.
Today she received a call from the vendor's solicitor to say that the house has now been sold (and contracts exchanged) with the previous buyer, despite my friend's solicitor now having completed searches and ready to exchange. It turns out that the previous buyer went back to the agent to say that she was now in a position to proceed with the purchase, but the agent told her it was days away from exchange. Having previously corresponded with the vendor's solicitor, she then spoke to them and the vendor accepted her offer and exchanged immediately. Presumably she had already done searches etc in order to be in this position - we don't know.
I'm just so angry for my friend and her husband - they had just accepted a place at the local primary school for their daughter. They've ordered a new sofa. They've literally packed up their house ready to go this week. How can anyone be so selfish to go out of their way to do this, and what absolutely bell* of a vendor!

Same

No it doesn’t. In Scotland, once an offer is accepted, the seller cannot accept any other offer, they’re locked in with those buyers until the sale either completes or falls through.

Yep this happened to me last year. In my case I was meant to exchange on the Friday and got the call Wednesday night saying they’d exchanged with the previous person. It was horrific. I only viewed the property as the previous person pulled out due to not getting a mortgage and a relationship break up so didn’t think anything of it. It’s cruel and horrible and I lost money on the surveys etc. luckily my solicitor refused to take a penny off me for their work . I got my karma back as a few weeks ago during the storms the little brook that was near the house completely flooded and as I’m in the near area I saw the witch post on social media saying her entire lower house and garden had flooded and she hadn’t taken the correct house insurance out.

You dodged a bullet there. Had your survey mentioned the flood risk?

As you see OP it happens, which is why traditionally you don’t do anything until you have exchanged contracts, except cross all fingers. But if she proceeds to sell their current place she’ll be well placed to buy the next one.

The seller can withdraw in Scotland right up until the Missives are concluded

This is an English thing. You cannot do this in Scotland. You could be sued. It's a gross system which needs sorted in England. I'm not sure if it's allowed in NI and Wales too.

Well in New Zealand you make an offer which is accepted both parties are bound to complete at that price. You can make a conditional offer but the conditions are very likely to be tightly controlled as to time and once they are met, you're bound to complete at that price. Chains are rare these days. The vendor can't sell to another buyer or raise the price and the buyer can't back out. When NZ was settled by Europeans they were determined to get rid of the antiquated English deed system and they run a register system instead. We did in fact sell our house and rented for a bit ready to pounce on the house that met our requirements. We saw our current house on Thursday, searched the title on Friday and made an offer on the Monday. There was a building inspection later that week and we went unconditional a day or so later. Probably a bit extreme to emigrate though to appreciate the simplicity of our real estate transactions.

Property solicitor here. I’ve not read your whole post, and it won’t really help your friend if they have exchanged, but get them to talk to their advisor about solicitors professional conduct rules for contract races - ie 2 sales running at the same time. I’ve not had this issue myself but there may be some recompense in there somewhere for your friend

It doesn’t sound like a contract race at all. It sounds like the other buyer bypassed everyone and went to the seller late last week with an offer, and the seller accepted. Shitty, but doable.

I think she (and you!) are far too trusting of the agent. The agent doesn't work for her, they're employed and paid by the vendor. They've gave her a heads up on Thursday but played it down, obviously hedging their bets so they didn't lose her as a buyer if this original buyer didn't go so the way. If she'd have known never to trust an agent then perhaps she could called her solicitor and rushed it through on Thursday.

Next time, never order sofas, removal vans etc etc until exchange, and NEVER trust an estate agent.

Why would you stop reading halfway through a post?!

I'm actually surprised the new school would give a place, when I moved one of my children's schools they had to see proof of address in catchment before confirming the place.

Agree with this. Where I am you can't just say you'll be living somewhere and apply for a school based on that - you need proof.

Whereabouts is this, OP?

They can accept any number of offers and then it’s a race to the finish line.

If a school has a space and no one higher on waiting list they will give it to you even if they are in Cornwall and you are in York.

If there are 2 contracts out at any one time on the same property with different buyers, is a contract race.

Property butting in England is a mess. My parents were gazumped 40 years ago. Things still haven’t changed. Our buyers on our last property threatened numerous times to pull out after offering as it ‘was taking too long’. This caused so much stress to us. It was 6 weeks from offer to completion. Hardly a long time at all!

There are some awful people about aren’t there. Your friend should rent for now, carry on selling her house and have the cash in the bank ready to go, this makes her the more desirable option to sellers.

That's awful @Bushyandbright

Maybe the other buyer had cash in the bank so didn't need to buy via a mortgage, that can speed things up hugely.

Either way, your friend is where she is now. I agree with people saying the best thing moving forward is probably for your friend to look at rental properties in the school catchment area she wants to move to. That would solve the school worries and put her in a great position for when a better house becomes available to buy. Not suggesting it's an easy option but it would be good for your friend to keep her buyer in this difficult market.

The English system is so flawed, really needs a massive overhaul to bring into line with the Scottish system .So much expense and stress

You're dead right about it being a shitty process in England.

Undeclared contract races, attempts by unscrupulous buyers to get a price reduction at the last minute, vendors who gazump - I was an estate agent for a couple of years in the '80s, and it's an appalling system.

One of the reasons I've been in the same house for over 30 years is that I can't face all the stress and aggravation.

The whole process desperately needs sorting out.

Which is fine if all the buyers know that's what it is and are happy to potentially lose a fair bit of money in fees if they're not successful. It's when people have no fucking idea another party is trying to buy the same house that it's a cuntish thing to do.

I’ve read this misconception countless times on MN. It could happen in Scotland. If missives have not been concluded, either party is free to back out.

Yes, I realised after I posted I was thinking about Reception entry not in-year!

Yeah that’s a potential breach of the code of conduct by their solicitors

I did it once...had to abandon an onward purchase as my buyer failed to get the money to his own solicitor but a week later, he did finally cough up.

I was then able to resurrect the intended onward purchase as all documents, searches, signatures etc were still with the respective solicitors and I was a genuine cash buyer. It all went through in a morning!

My case was a bit different as there was no other intending buyer in the picture so nobody got crapped on.

That was a cruel thing to do your friend, OP, so I hope they get a diamond of a property when they do finally move house.

I agree. I'll speak to her after work and suggest this. It's easy for us to be logical as it's not us affected - she was distraught last night and couldn't think straight. It was a beautiful house in a perfect location for a catchment to a good high school. There's nothing else available at the moment in that location for their budget.
It's just a shitty system that allows shitty people to be shitty. Sigh.