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!

So number one is covered when I said this wouldn’t apply to the buyer because it would be subject to survey

It needs to be a legally binding contract that you lose your 10% if you pull out of the sale as a seller or reimburse the buyers costs whichever is less
As a seller, you know what you have and you know what you need to proceed with the situation in terms of cost
Nothing deviate from that once you’ve agreed to the sale
Doesn’t matter if your granny dies. It doesn’t matter if you get divorced. It doesn’t matter if the shed catches fire. You are moving. Once you’ve signed that paperwork. All it’s really doing is moving exchange of contracts forward to the beginning of the process rather than the end.

That's truly awful behaviour by the vendor, I am so sorry for your friend. This sort of thing also undermines the (already terrible) system as a whole as it adds to the distrust on all sides.

I'd honestly be tempted to write a letter to be passed on to the vendor by the estate agent laying out exactly how it has affected her and her family. I imagine they probably wouldn't pass it on but it might make her feel better to get it out anyway! Perhaps a public review of the estate agents concerned might make them realize this is not good for their business either.

I do com prop but had a contract race situation recently - had issued a contract pack to buyer 1 some time ago, it’s dragging on, buyer 2 has offered - I have explained to client if they want me to issue a new contract I have to let buyer 1 know we’re issuing a contract, and let buyer 2 know there’s already a contract in place. If client refuses, I don’t think I can act. Sounds to me like if this has panned out as OP understands, the sellers sols have almost certainly breached their professional obligations

They go after people for dishonesty all the time. Sadly it’s manly juniors. I’d certainly be raising it with the firm.

I have seen it happen although personally I wouldn’t act in these circumstances

Your friend jumped the gun with the school place and sofa ordering and packing up to go before contracts were exchanged.

@Supperlite
"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."
Sadly, Mortgage companies usually want their own survey. No one would want to rely on the seller.
The length of time is usually due to obtaining the mortgage. A mortgage on principle is based on the buyers earnings, but often the mortgage company will only offer up to what THEY think the property is worth.
@whattodoforthebest2
I am a bit confused by the contracts 'ready to exchange', as that means the seller surely MUST have signed. Otherwise they would not be ready to exchange. It sounds bizarre.

Re signed contracts - the solicitor will hold the signed contract until everything, mortgage, survey etc is in place. The physical signing of the contract is irrelevant - the solicitor is holding it pending contact with the other solicitor (the buyer's or seller's) at which point they will formally agree that contracts have been 'exchanged'. That's a legal formality and nothing is binding until that point.

The seller's survey (the Home Report) has to be done by an accredited surveyor so their valuation is reliable. I have known people recently where the mortgage provider has asked for their own survey but only because they don't understand the HR system. They have accepted the HR valuation eventually.

Update:
I've just learned that the house was listed with another agent previously, which was who the buyer dealt with. When her sale fell through, the vendor changed to a different estate agency and this is who my friend has been dealing with. So the current agent really didn't have a clue and presumably may be missing out on their fees too?!

Don't worry. Estate agents always get their fee.

Don’t book removals🤷‍♀️ surly you have to book removals to move into your new home.

Well you book them after exchange so you know it's definitely happening. I last moved a long time ago but arranged completion to be a month after exchange, and last year my son moved and arranged the same gap. He had made enquiries with movers to see about availability around the expected date but nothing concrete was booked until exchange had taken place, just in case it fell through.

Neither did he and his wife buy any new furniture ( moved to a much larger house) or make any arrangements about anything until exchange had taken place, for the reason that things can and do fall through before then.

here in Northern Ireland you generally complete and move on the same day.

Ah right, it must be a different system in England and Wales.

Yes you complete and move on the same day.
But exchange happens before completion day ideally.