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!

That isn't what happened. A previous buyer got close to exchange then their chain broke. This buyer came in afterwards.

You can back out, but you can’t accept an offer from another person (gazumping). It is not unlawful per se but it is a professional breach of the solicitor’s duties so they would either have to say no or withdrawing. So the reason people say this is because they clearly know the law society of Scotland’s rules better than you

www.lawscot.org.uk/members/rules-and-guidance/rules-and-guidance/section-f/division-c/guidance/gazumping-gazundering-and-closing-dates/#:~:text=Here%20are%20some%20gazumping%20laws:%20*%20**Seller's,a%20time%20limit%20specified%20in%20the%20missives

It's the system in England and Wales that's flawed it works against sellers as well as buyers.

My son in laws SIL's flat was under offer and scheduled for a same day exchange and completion while they were on honeymoon. There was a flurry of signings and document drop offs theday they travelled but when they came back nothing had happened and the buyer called the whole thing off two weeks later with no explanation.

That was over a year ago They've had their first anniversary and a baby and they are in the exact same position - everything signed and ready to go. Every week the buyers solicitors say they expect to exchange imminently but tit just hasn't happened.

Will the estate agent lose out on his commission

No mortgage adviser

The wouldn’t allow to offers to proceed. They would tell the lower offer a higher offer has been accepted and they need to increase

Nightmare! The whole process is psychological torture.

Of course they would. You seem to be awfully naive and think the world is a lovely fair place

When I bought and sold recently missives were only signed 7 days before entry date. It was definitely squeaky bum time.

You speak as though the Estate Agent has any control over the sale, they literally get paid to introduce somebody
I could set up an account on Rightmove as an Estate Agent tomorrow and charge you all a grand each to just introduce somebody to you in fact I believe that that’s exactly what Yola and purple bricks have done.
What happens next has absolutely nothing to do with the Estate Agents these days. They used to be amazing and have a contract chaser employed within every high Street agency. Those days are gone.

I'm not in UK, so forgive me, but would introducing something like a 10% unrefundable deposit on acceptance of offer, give any certainty to buyers (and sellers)? Are there any obstacles to this, and should it be something to introduce.

I cannot believe how complex house buying and selling appears to be in England anyway, not sure about NI, Scotland and Wales!

I had an awful thing happen when I bought my wedding dress, was paying a bit off at every appointment and then the shop went bankrupt and everyone disappeared. Heartbreaking that there is such unkindness and uncaring out there. People were telling me I shouldn’t have been paying it off like that until I had the dress in my hands.

Anyway, I really believe that something better will come up for your friend and look at the care she is showing to her buyer, she’s obviously a good person. Try to leave the misery with the other two and look for the good. Can you imagine what she she would have had to potentially deal with in that house when the owner has no morals, better off out of it, someone might be looking out for your friend 😇. Also, when my friend was moving she secured two in year moves for her children by telling them where she was moving to and how far along they were in the process etc, it was a tiny village school, not sure if that makes any difference but it does happen.

Well, yes, if you place the one time 10% deposit in an escrow type account, To Be released on exchange of contracts that could work and it shows everybody’s seriousness
But then charge a 10% penalty if anybody pulls out for whatever reason in terms of the sale
The same wouldn’t apply to the buyers because they obviously don’t know until they get their survey back what they’re buying

It didn’t really happen to you though, did it? You were aware when you viewed the flat that there was a sale progressing yet you were still willing to go ahead and try to buy it, all the while knowing that there were buyers who’d agreed the purchase and probably had no idea that you were in the picture. You were part of the problem.

Much better! Sorry for assuming!

In all my time (25 years) working for conveyancing department in solicitors firms, I have never come across this but -

https://forums.moneysavingexpert.com/discussion/4563787/can-the-seller-accepts-two-offers

The whole buying and selling of property in the UK has become horrific! Totally put me off ever moving again. Several of my friends feel the same too. The lies I uncovered between Estate Agents when we were selling were truly shocking. On top of it all we were gazumped right on Christmas! All our possessions boxed etc ready to go as they wanted a quick move. Thankfully we ended up with a much better property in the end but it took another 6 months of stress to get there not to mention the cost of it all. Totally feel for your friend op it’s such a shitty thing to happen. What I did learn from the experience was never trust a word the estate agent tells you and the solicitors often aren’t much better so question EVERYTHING. Wishing a much better house for your friend to come along very soon.

Yes - to permit two purchasers to work on a purchase at the same time, I think the vendor’s solicitor would be obliged to tell the parties they are in a “contract race”. Otherwise they should have communicated that they are “withdrawing papers” from the OP’s friend.

That is not true

In Scotland the seller pays for a home report. Granted this only highlights what the surveyor can see and isn't an extensive survey. It also provides an energy certificate. The home report is provided to anyone who enquires about the house and you can then decide if you want to view.

When we were buying we offered and had accepted the asking price, the condition being that the agent stopped advertising the house. Shortly before we were due to exchange the agent phoned to say that a previous viewer had made a better offer and they, the agents, were legally obliged to put it to the vendors because it was from a viewing before we saw it. Luckily the vendors stuck with us!
Another time we were in the process of buying a house, not exchanged and it seemed to be going slowly. We were living abroad and when we came back on holiday we rode by the house and were amazed to see new windows and a skip on the drive! We knocked on the door and the 'vendors' were very embarrassed, they'd withdrawn from the sale weeks earlier, the agent and our solicitor had been informed! Our solicitor next day blustered he was about to write to us, it had happened 'very recently' and he wanted us to pay for the work he'd done. As the vendors had had new windows and other work done it couldn't have been 'very recent' so we refused to pay anything which eventually they agreed to.

There is no contract until the Missives are concluded so there can be no breach of contract

This would work technically, but in reality:

1. what if something comes up on the searches or survey which is unacceptable to the purchaser? It’s not fair for them to lose out because the property is defective in some way.
2. the contracts etc for conveyancing are all in standard form more or less, introducing this sort of drafting and administration would necessarily drive up prices.
3. this doesn’t solve the problem of unscrupulous sellers allowing gazumping to occur.

The Scottish system of the seller preparing a sale pack for purchasers to rely on and offers made being legally binding feels like a more appropriate mechanism to avoid this sort of issue.

Ok 👍

Lessons to be learned:

1. Estate agents lie. They do it for a living. Harsh but true. They lie to buyers and sellers alike. Don't for a minute expect them to be honest about anything. Their fee is all that matters, regardless of how they get it.
2. You can exchange and complete on the same day, a day later, a week later, whatever, if that's what both parties have agreed to.
3. The solicitors are not bound to notify anyone else other than their client where they are in the process. Two firms working on the same sale/purchase may not be aware of the other's presence. The only party that will know is the seller and their solicitor. (The solicitor may, however, have a duty to inform another firm that there is a 3rd party involved.)
4. Neither party is bound to anything legally until contracts are exchanged. Then there are terms which they must abide by, but they can still, with penalties, pull out. So, don't book anything, buy anything, assume anything until you've exchanged, regardless of what anyone (especially the estate agent) tells you. It is only on the exchange date that you will have a definite date for completion.