Gazumping....

silvercar

Astaroth wrote:

No more than you can sue if 5 minutes before exchanging your buyer says they want to drop their price by £5k.

There are a lot of different mentalities in people who are house buying.... to me you arent there to win friends but to make the largest single purchase the average person ever makes. There is only one person to look out for (and yes I would complain if someone did it to me but I would understand their reasonings)

So what's the reasoning? They want to get away with paying less!

Jorgan_2

Tassotti wrote:

Too true..gazzumping, gazundering are a pain in the proverbial. Any suggestions to how improvements can be made?

You will need a system that ties people into buying/selling a property within a set period of time. If either party withdraws then compensation is paid. Likewise, no other offers can be entertained once an offer has been accepted.

Sounds relativley simple, however sales don't collapse just to people getting a higher offer, should somebody who has just lost their job be penalised the same as someone who has had a higher offer?

Is compensation paid to the direct party involved or to the entire chain? Also at what level is the compensation set, does it cover the costs incurred or does it take into account a figure for the emotional stress involved, how do you measure that, every person is different.

Tassotti

I got gazzumped on a couple of properties in Stratford last year (luckily I might add(.

My solicitor mentioned to me that there is an agreement that can be set up (can't remember what it is called) that can reimburse buyers for expenses outlayed. if vendor defaults

As for emotional recompenses, go to the USA, and inform Judge Judy.

Sue for anything, everything

All about the money for me

Poppy9

It's all very well to be outraged at being gazumped but if you were selling your house for £200k and someone then came along and said I will give you £235k would you take it? I'm sure I would as £35k is still a lot of money to me.

silvercar

Poppy9 wrote:

It's all very well to be outraged at being gazumped but if you were selling your house for £200k and someone then came along and said I will give you £235k would you take it? I'm sure I would as £35k is still a lot of money to me.

And then the seller of the house your after would realise they could get more for their money and accept a higher offer!

If you are behaving correctly, you won't be showing any more people and so won't be in a position to be given any other offers.

Tassotti

Confirms to me that you are truely honest..could do with you working with me

Gazzumping I can understand, but Gazundering is for the weak willed, scum of the earth people that I would ...............(was gonna type something, but worried about legalities)


Evict Leah...what a dog ....great breasts though (male point of view) dog

Astaroth

Well, with gazundering the buyer is the one that has spent on all the money on the surveys/ searches etc and if the seller doesnt like the new offer they can simply pull out... obviously a hard choice if you are in a chain free but a chain free seller can just tell the buyer where to stick their lower offer and not have any significant financial loss.

Poppy9

silvercar wrote:

And then the seller of the house your after would realise they could get more for their money and accept a higher offer!

If you are behaving correctly, you won't be showing any more people and so won't be in a position to be given any other offers.

You don't need to be showing people. One of my neighbours who had an EA for sale sign with sold across it had a letter popped through his door from a passerby who said they were desperate for a house in this street and would pay him £20k on top of his asking price, plus they were a cash buyer. Now he had agreed a sale for £250k from someone in a chain so 20k is a big margin. He did the right thing and stuck with his first buyer, thus denying himself 20k. However his original buyer then tried to get him to knock £5k off for things brought up in the survey. He told them no and said he had another buyer willing to proceed and then went with the buyer offering £270k. No problems with that survey.

At the time I thought I didn't know what I would do if someone offered me and extra 20k. I know further up the chain the same could happen to me, but unless the EA tells the seller that I have had a bigger offer how would they know.

House buying and selling involves serious money. You have to make sure you are getting the best possible deal. Given the current situation you don't know if your buyer is going to try to gazunder you at exchange so why stick with them. You have no contract with them so they can pull out whenever they want and you may have lost your bigger buyer.

silvercar

My first buyer withdrew and went off to rent because he had exchanged on his own place and we weren't prepared to exchange on our sale without exchanging on our purchase.

We then got another buyer at the same price. Then the first buyer gets in touch and asks how we were placed. At this point the first buyer is a cash buyer and the second buyer is stuck in a chain that we are holding together by buying out the bottom. I also knew the first buyer would increase his offer.
I could easily have invited them round to discuss things but I didn't, I said we were under offer and left it at that.

I could have dumped the second buyer and saved myself grief and money and probably got an offer £20k higher. But that wouldn't be the correct way to behave.

Buying a house is painful. You need to sleep at night knowing you've behaved honourably. Equally I won't stand any nonsense from anyone else in the chain - I've got a retention on the purchase of the BTL for work that the seller hasn't completed.

Poppy9

silvercar wrote:

I could have dumped the second buyer and saved myself grief and money and probably got an offer £20k higher. But that wouldn't be the correct way to behave.

It depends how much £20k means to you and how much you are buying/selling for. On £100k purchase then I think only a fool would turn down the extra money. On £500k house then it depends on reasons for selling.

The correct way to buy and sell would be to agree a valid binding contract at the outset. As it stands this doesn't happen and even the most honourable of people can end up being dumped on. It only has to happen once to be left sitting with packed up goods and an absent buyer for you to be tougher second time around. IMO most people faced with a vastly increased second offer will consider it. They may not sit happy with the decision they reach over the offer but it will be considered and in many cases used as leverage to increase original offer.