Government may look to ban Gazumping

by Property 118

14:20 PM, 10th May 2016
About 2 years ago

Government may look to ban Gazumping

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Government may look to ban Gazumping

Around 200,000 or 18% of house purchase transactions fall through every year with the Telegraph reporting that the Department for Business Innovation and Skills have been in talks with the National Association of Estate Agents (NAEA).gazumping

The discussions were to consider the idea of introducing the Scottish system which is also used in other countries in Europe where property sales are legally binding at the point an offer is accepted by the vendor.

Currently in England and Wales a purchaser can have the sale fall through or be “Gazumped” at any point up until exchange of contracts.

However this may be unpopular with sellers as they would probably have to cover the costs of survey and legal fees of over £1,000 which are currently paid for by buyers.

In the Budget last March the Government said, “We will publish a call for evidence on how to make the process better value for money and more consumer friendly.”

National Association of Estate Agents MD, Mark Hayward, said “the English system for buying and selling property dates back to the 1920s and has not been updated for nearly 100 years. It is an archaic system which doesn’t allow for modern technology. It needs updating to allow for as much work to be done before the point of offer as possible.”

As yet we have no further confirmed details or timescales.



Comments

A Jenkins

13:55 PM, 11th May 2016
About 2 years ago

A few years ago, we placed a sealed offer for a derelict property ABOVE the asking price in Bethania, Blaneau Ffestiniog. We conducted our due diligence research, and on seal bid opening day, we were the only ones that submitted a bid, The seller refused to sell-asking us to up the offer by 2ooo. We had already spent 800 on the survey, and 650 on the solicitor fees, but because of principle, we refused to up the offer. Gazundering should also be banned! I hold the estate agent in Blaneau Ffestiniog responsible for allowing his client to use this practice and will not do business with their firm ever again. Estate Agents should have higher standards than to allow these practices to take place.

David Humphris

14:54 PM, 11th May 2016
About 2 years ago

The aim of the Home Information Pack was to supply the buyers with a survey plus all the searches they required so the contracts could be issued in a matter of days. Thus reducing both the buyers cost and shortening the time for Gazumping. This process is used in Scotland but this government scrapped it the week they came into power. The first of many errors.

Rod Adams

15:09 PM, 11th May 2016
About 2 years ago

Under the Scottish system it is standard practice that if you bid at a closing date i.e. a sealed bid situation, and you are the only offerer then your offer is withdrawn which then gives the opportunity to go back with a revised offer in the knowledge that there is no competition. The smart move is to then offer a lower amount. Seems odd that a seller would risk scaring off their only interested party by asking for a higher bid.

A Jenkins

15:26 PM, 11th May 2016
About 2 years ago

Thanks for your comment. It was our feeling that because we offered more than the asking and we were sole bid, they would have felt it was a fair offer. They ended up selling 6months later and it took the current owners another 6-8months to make it habitable. In hindsight, I am glad we didn't get the place, we found a more picturesque spot on the coast that was 1/3 the price we offered for the prop in Bethania.

Gary Arnold

10:26 AM, 14th May 2016
About 2 years ago

I agree we should have a better system to lock in the deal but we are currently buying in France and the system there binds both parties together at an early stage. Great we thought but we started the process last Aug! The seller is having difficulties as the property was purchased in the equivalent of a Ltd Company with 10 family members. We should have completed in Jan! We cannot get out of the contract unless we take them to court or die or the property is burnt down!! We can try and force them to sell through the courts or ask the court for our deposit back! So whatever system we adopt needs to be very fair to both parties. In hindsight we should have had another get out clause in the contract if they didn't complete on the due date. We cannot offer on another property either as we are bound to this one so in my opinion the French system is stacked against the buyer!


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