Gazundering

JTB_2

Hello,
I was reading a couple of other threads and the subject of Gazundering came up. As a 'soon-to-be' house seller, is there any way of stopping this happening? Could you draw up a mini-contract between seller and buyer to the effect of 'whoever pulls out/reduces offer/increases house price without good reason (i.e survey and searches are all okay)' will forfeit a deposit? Am I being naive? Would this put people off?

Thanks!

alchemistkevin

I don't think such a contract will hold true under English law.

At a very very very minuscule level that it does, I wouldn't enter in to negotiations if a house I wanted to buy required me to sign it.

I reckon you'd be better off without it even if it was legal.

mrsukyankee

Nope, can't do it. But what you can do is be ready to move as quickly as you can and try to move the buyer as quickly as possible. But it still can happen....just as gazumping happened in the spring of 2007.

We got gazumped, but realistically - it was better to sell then argue...and if we were trying to sell now, 3 mo later, we'd probably not get close to what we got even with gazumping. It stinks, but it happens.

Richard_Webster

In theory you can draw up such a contract but your solicitor is going to charge more for dealing with it because the details are the problem. Defining the precise circumstances under which it is reasonable for a buyer to pull out and reclaim his initial deposit is going to be a source of argument and you can spend more time and money faffing around with that than actually dealing with the legal work on the sale. If it had been simple to do it would have been done years ago as a matter of course.

Have a look at this thread where the seller thought the agents had sorted out some kind of agreement and they apparently didn't! http://forums.moneysavingexpert.com/showthread.html?t=1132677

silvercar

There are two catagories for gazundering, those where the buyer genuinely can't come up with the cash eg can only get a mortgage for X which, together with deposit, is 5k short of agreed price and those where the gazunderer is trying it on.

The first can usually produce mortgage offer letters (or should I say rejection) to prove that their point, the latter can't. The first will usually not leave it to the day of exchange to say they can't get the money but will start negotiating as soon as they know their problem.

You could always instruct your solicitor to inform any buyer's solicitor messing around at exchange point that they have been instructed to reject all gazundering and that they won't even speak to their clients about it. MAy convince the bluffers. Remember anyone "trying it on" in this way will already have spent money on surveys, mortgages and solicitors.

theGrinch

yes you can draw up such a contract at a cost and not just extra legal fees. you might limit your pool of buyers and even then once you have a buyer it could take weeks to haggle over such a contract!

Treadmill

Getting a buyer is hard enough as it is, getting a buyer prepared to lock themselves in to a price might prove impossible