Days of Guzzumping back. How to deal with it?

eagerftb

ging84 wrote: »

for the purchaser to enter such an agreement would be much more difficult, there are plenty of good reason they may choose to pull out, issues coming up during the survey or the conveyancing process for example.

The vendor has no real good reasons to go back on a sale, unless the purchaser turns out to be a money launder or something like that

I think this is a sensible way but how many people get ready to do it. If it were for sellers they would even want the option to get more money even after exchange.

weeg

Road_Hog wrote: »

And as a vendor, why would I wish to sign a binding agreement that the purchaser will also not be bound?


And that is why no such agreement exists, because the buyer wants security but doesn't want to be bound by the same agreement.

Except such agreements do exist in Scotland. When you offer for a house up here you do it in writing, through a lawyer, with both a figure and an entry date. You might also put in some conditions such as 'fix the gutters'. Once the seller accepts you are both legally bound and liable for costs if pulling out - and for the buyer those costs might be as high as the whole purchase value.

Sometimes there is a verbal offer first, but it needs to be followed up with a formal offer within days.

Sure, the system here has it's flaws (sealed bids), but no chains, no gazumping, no sully nonsense. Once a sale is agreed it's a done deal.

ging84

Road_Hog wrote: »

And as a vendor, why would I wish to sign a binding agreement that the purchaser will also not be bound?


And that is why no such agreement exists, because the buyer wants security but doesn't want to be bound by the same agreement.

They would only be binding themselves into something they have already agree to do, if it was standard practice no one would even question doing it

mgtr

http://moversandstorers.co.uk/gazumping-gazundering-completing/

vectistim

Agreements that bind the sellers do exist in England - option to purchase - generally used by developers when trying to put together a deal that involves buying bits of land from several different owners.

There's no reason why you couldn't do the same for a conventional purchase, although the solicitors would probably be a bit sniffy (this wouldn't bind the buyer to the purchase, but they can pay a consideration for the option to show their commitment).

googler

weeg wrote: »

Except such agreements do exist in Scotland. When you offer for a house up here you do it in writing, through a lawyer, with both a figure and an entry date......

Sure, the system here has it's flaws (sealed bids), but no chains, no gazumping, no sully nonsense. Once a sale is agreed it's a done deal.

Please tell us why a closing date, with offers to be submitted privately by that date, is a 'flaw' ... ?

weeg

googler wrote: »

Please tell us why a closing date, with offers to be submitted privately by that date, is a 'flaw' ... ?

Because, combined with 'offers over' buyers can end up paying more than the house is worth. It's great for sellers. It's a lot better now than it used to be, as now we have Home Reports, ie a survey and mortgage valuation provided up front, by the seller. Going back a few years, homes were usually advertised at 15-20% below what they were expected to sell for, and potential buyers could end up paying for surveys on home they were then outbid on.

There's a house we would like to buy. It's o/o £110k. Valuation says £115k. There are 9 other notes of interest. Deciding what to bid is nerve wracking. Having literally no idea what other people are thinking. With the english system (as far as I can see), there is a room for a bit of back and forth at the bidding stage.

It is a far more sensible system than having chains and whatnot though.

Also, if I had said it was a flawless system I'm sure I would have been flamed for something.

googler

weeg wrote: »

Because, combined with 'offers over' buyers can end up paying more than the house is worth.

But surely, on the basis that "a house is worth what someone is willing to pay for it", the market determines its own level by what buyers are prepared (or able) to offer?

It's a lot better now than it used to be, as now we have Home Reports, ie a survey and mortgage valuation provided up front, by the seller.

Agreed

Going back a few years, homes were usually advertised at 15-20% below what they were expected to sell for, and potential buyers could end up paying for surveys on home they were then outbid on.

... but most buyers made their offers without surveying first, and included a clause in their offer, that it was "subject to survey" - so only the successful bidder would have a survey done.

There's a house we would like to buy. It's o/o £110k. Valuation says £115k. There are 9 other notes of interest. Deciding what to bid is nerve wracking.

With that number of notes, all you can do is decide how much it's worth to you, how much you can reasonably afford, and go with that.

You don't have to wait until they declare a closing date, you know... if you can afford and want to pay £118k, say, you can offer that straight up, and get a Y/N from the sellers straight away. The note of interest system isn't a legal obligation, it's a courtesy between buying and selling agents and solicitors, and if they're blown away by your offer, they can accept it without reference to the other notes.