Gazumping....

Rimo2021

Poppy9 wrote:

Agree the Scottish system is no better. Why ask for offers over. Just name your price and get on with it. Can you imagine shopping at Tesco's and the food is on sale at offers over. The best bid gets the last tin of beans:D

Because thats the best way for the seller to get the best price. If you are selling something to someone and discussing a price it's generally best to get them to name a price first. Thats just a negociation tactic.

Rimo2021

Astaroth wrote:

No thanks, call me odd but I enjoy the current setup and have previously made significant financial gains for myself by it.

I have made significant gains from the scottish system. Because buyers know they only have 'one shot' at getting the property they put in their top offer immediately - it saves time and prevents that daft to-ing and fro-ing that Kirsty and Phil seem to get off on.

It basically means as a seller you get the most someone is willing to pay for your property without having to resort to calling each others bluff or tolerating estate agent lies and tricks.

Didn't anyone see that episode of 'Location location' where a house the couple on the show wanted went to sealed bids and with Kirsty'e expert advice the couple ended up offering about 70K over the next bid? If the estate agent hadn't messed up and sent the buyers details of all the bids by mistake instead of sending it to the sellers the sale would most likely have gone ahead and the sellers would have made a killing. If that had happened in Scotland the sale probably would have gone ahead because by the time Royal mail had got their crap act together and delivered the letter - the missives would most likely have been exchanged and the buyers would be unable to pull out..

That's how the offers over system works - it generally favours the seller.

Jorgan_2

Rimo, thanks for the update. What happens while the survey is being done, does the proerpty stay on the market? Whats involved with the missives, is it things like searches etc?

Poppy9

Jorgan wrote:

But would you ever accept an offer from somebody who hadn't seen a property? I wouldn't. I would also be concerned about the credibility of a buyer who could offer in such an off the cuff attitude, the may be as likley to withdraw without much consideration.

Ummh I have done!! They paid full asking price and completed in 4 weeks. Previously 3 buyers who had viewed the house numerous times, measured up for curtains etc let us down. Two buyers lost their buyers so couldn't proceed anymore, third buyer was buying two houses at the same time and at the last moment asked us both to drop our price by a few grand (which made it worth her while paying for two surveys etc). We refused. As we were going to be moving into temp accommodation as we hadn't found a house we wanted to buy it was no skin off our nose. We then had a call from EA who said that a local housing association were interested in our house for their part-ownership scheme. Without viewing they offered full asking price and no survey.

My friend who has just relocated to England (we all have our crosses to bear) sold her house to an American couple who saw it on the internet. They have relied on pictures and videos to buy the house with a £600k price tag.

Jorgan_2

Poppy9 wrote:

We then had a call from EA who said that a local housing association were interested in our house for their part-ownership scheme. Without viewing they offered full asking price and no survey.

My friend who has just relocated to England (we all have our crosses to bear) sold her house to an American couple who saw it on the internet. They have relied on pictures and videos to buy the house with a £600k price tag.

Housing Associations aren't exactly normal buyers, surprised they didn't have a survey.

Poppy9

Jorgan wrote:

Housing Associations aren't exactly normal buyers, surprised they didn't have a survey.

It was March the end of a financial year, they had extra grant monies and grant conditions are quite stringent in that it has to be spent in the correct financial year. They bought up a few houses in the same area and I think they thought that the houses had stood for 100 years and regualarly changed hands that they were on safe ground.

You probably think I'm a bit mad but I bought a car from a picture on a website (not ebay) and a chat with the chap in the office. Have to say the car exceeded my expectations.

Rimo2021

Jorgan wrote:

Rimo, thanks for the update. What happens while the survey is being done, does the proerpty stay on the market? Whats involved with the missives, is it things like searches etc?

What usually happens is that the house is put on the market. Anyone interested views it and if they like it and plan to offer for it they will tell their solicitor who then contacts the sellers' solicitor and formally 'notes interest' in the property. When the sellers' solicitor reckons theres enough interested parties drummed up eg. when he has received several formal 'notes of interest' a closing date is set - usually at noon on whatever date and the potential buyers' solicitors submit their offers just before the deadline. The successful bidder is notified and the survey (assuming the offer was 'subject to survey') is generally done same day or next. At this point the offer may change - if the survey highlights faults the offer may be dropped accordingly. The seller then has the choice of accepting that or negociating or going to the next highest bidder - it's only a short delay so they are most likely still interested in buying.

The missives are just a series of letters between the buyers' and sellers' solicitors a bit like finalising the contracts in England but which happens much sooner in the conveyancing process. The two solicitors exchange letters and iron out any of the finer details that were not explicitly mentioned in the original. Once both parties are agreed on all of the details of the offer which usually does not take long the missives are 'concluded'. This means that both parties have now entered into a legally biding contract and pulling out will be expensive as you would have to pay compensation.

Basically it all happens pretty quickly so you know within a short time you definately have the property or have definately sold the property and there's no messing about after that with gazundering/gazumping. Recently the system has been undermined a bit by the less attractive parts of the English system - i.e the length of time between offer accepted and it being legally binding has been getting longer which allows for gazumping/gazundering but it's frowned on by solicitors who don't like !!!!!! off the other solicitors before lunch at their gentlemans' club or a round of golf!! It's also being addressed by people offering their property with 'standard missives' which is effectively the seller making the terms known in advance and effectively saying 'don't offer if you plan to mess me about and try any tricks'