Gazumping /fee protection insurance

Davies998

A few years ago when I bought a house I was gazumped on the purchase, it was quite late on so I suffered a loss of the fees I'd already paid, survey, mortgage broker and conveyancing. It really really annoyed me. I'm looking at buying again, is there any form of protection I could take out to protect myself this time round?

Goldfish52

Subbing. We just found out that despite accepting our offer, our vendor is still actively marketing the property. We have already started the conveyancing and didn't know this till today. Not sure whether we should just withdraw our offer as the vendor doesn't seem particularly ethical. :-(

Wh05apk

Most solicitors do no sale no fee, except for search fees etc, find a broker who doesn't charge, personally if they are still marketing the property though, I would walk away, otherwise a month down the line on the day of exchange they could accept a slightly higher offer.

Thrugelmir

Goldfish52 wrote: »

Not sure whether we should just withdraw our offer as the vendor doesn't seem particularly ethical. :-(

Have you spoken to the EA?

Davies998

Wh05apk wrote: »

Most solicitors do no sale no fee, except for search fees etc, find a broker who doesn't charge, personally if they are still marketing the property though, I would walk away, otherwise a month down the line on the day of exchange they could accept a slightly higher offer.

That's fine but I was speaking to a friend who's just been gazumped on a repo that he was buying, a condition of purchase was that it stayed on the market with the price paid put on the internet. It was sounding like a cheap way to get a house until he told me what his failed attempt to buy it had cost him. He had search fees, a stupidly high survey fee for his BTL and mortgage application fees to pay and nothing to show for it and none of which he can get back! He didn't use a no sale no fee solicitor aswell so I think there would be conveyancing fees on top.

The search continues.....

Keekles

On a repo or 'commercial' buy, the offer price has to be announced and the property will remain on the market until the highest bidder exchanges on it. He should be well aware of the risks involved given you suggest he's a BTL investor; and if not, the EA should have made him aware.

There are tied advisors that can offer a valuation guarantee (i.e. they'll pay for valuations on further offers if you're gazumped / adversely valued etc.) and as suggested, you have the option to use a no-fee independent broker also.

Davies998

Found an insurance policy that does it, how does this sound?

£79.50

Covers £750 conveyancing fees, £500 survey fees and £250 mortgage fees.

They said it covers gazumping, if the seller pulls out and also if the house needs lots of rectification work doing to it after survey. Sounds ok to me, any thoughts?

opinions4u

Davies998 wrote: »

Found an insurance policy that does it, how does this sound?

£79.50

Covers £750 conveyancing fees, £500 survey fees and £250 mortgage fees.

They said it covers gazumping, if the seller pulls out and also if the house needs lots of rectification work doing to it after survey. Sounds ok to me, any thoughts?

It depends what triggers payout.

Do you have a link? Or a search term we could use?

Davies998

opinions4u wrote: »

It depends what triggers payout.

Do you have a link? Or a search term we could use?

Unfortunately not. I phoned a someone from a thread I found on another forum. I just tried to paste the link but mse won't let me, if you google - gazumping insurance property tribes - the thread should come up.

They sent over a few documents for me to look at, I don't know if I can upload them from my ipad.

The pertenant points that I've copied;

What the insurer will pay
Following an insured event the insurer will pay your costs & expenses up to the limit of indemnity provided that, at the start date:
1. You are over 18 years of age;
2. The purchase of the property is not subject to a contract race or sealed bids;
3. You are using a solicitor or a Licensed Conveyancer to conduct the conveyancing of the property;
4. You have not had a survey carried out on the property.

Insured events covered

The purchase of the property failing due to any of the following occurring during the period of insurance:

1. The property is withdrawn from sale by the vendor due to reasons beyond your control.
2. The vendor receives and accepts an offer from a third party, which is a minimum of £1000 greater than the offer from you previously accepted by them.
3. A Local Authority search highlights that the property is the subject of a compulsory purchase order.
4. The vendor is not legally entitled to sell the property or to transfer interest in the property to you.
5. You or the person who is buying the property with you:
a. die and the survivor is unable or unwilling to continue with the purchase; or,
b. are given notice of redundancy and you are unable or unwilling to continue with the purchase; or;
c. are given notice of relocation and you are unable or unwilling to continue with the purchase.
6. You withdraw from the purchase of the property due to an unforeseen illness;
7. The initial mortgage lenders’ valuation of the property is less than 90% of the sum you have offered for the property and which has been accepted.
8. Prior to the releasing of funds the mortgage lender insists on rectification work being carried out to the property, the cost of which exceeds 10% of the sum you have offered and which has been accepted.
9. The mortgage lender applies a retention on the loan for the property and this figure exceeds 10% of the sum you have offered for the property and which has been accepted
10. The property sustains damage during the period of cover where the total cost of rectification work exceeds 10% of the property value.
Cover will end when
This policy will end automatically 120 days after the start date or on the date of any of the following occurring, whichever happens first:
1. you make a claim on this policy;
2. you or we cancel this policy;
3. you complete on the purchase of the property.
What is not insured
You are not covered for costs & expenses:
1. Incurred before the start date
2. If you withdraw from the purchase of the property for reasons other than those covered by this policy.
3. If you are aware of a previous survey having been carried out to the property up to 90 days prior to the start date that may give reasonable cause for the purchase to fail.
4. If you are aware, prior to the start date, of any circumstances which could lead to a claim being made under this policy.
5. If you deliberately and knowingly cause a delay or use unreasonable behaviour that results in the failed purchase.
6. Where they can be reimbursed by your employer.
7. Where you are able to obtain a refund.
8. Where, in the case of redundancy:
a. You are self-employed;
b. you are a company director or partner of the company giving notice of redundancy; c) the redundancy is voluntary.

And

Limit of indemnity
The maximum costs & expenses the insurer will pay relating to the purchase of the property that you are legally liable for or have incurred up to the claim date:
1. up to £750 in total for conveyancing fees, including the amount charged for Local Authority Searches;
2. up to £250 in total for mortgage arrangement fees/ lenders fees;
3. up to £500 in total for survey fees and valuation fees