Creating a contract race between EA and private purchasers

Dusk1983

Our sale fell through when the buyers changed their mind after 2 months, and now we're at risk of losing our onward purchase. Naturally we're pretty upset and determined to play hard ball from here on.

We have a new agent marketing the property, and also have a number of private purchasers lined up. Our position is that we refuse to remove the property from sale until contracts are exchanged or money changes hands. Therefore, I think we want to create a contract race. We plan to be clear with everyone about this.

Does anyone have experiences of this or private sales in general? One thing that isn't clear is Memos Of Sale. I guess we need to create a Memo Of Sale ourselves if we sell privately, but in a contract race, would there be a number of these Memos sent out? Are they in any way legally binding?

Ally_E.

This happened to us, the sale fell through 1.5 months into the process. We also decided to play hardball, but it's not very realistic. The people coming to view your house don't know what happened and don't really care, they will not be willing to offer on a house that will remain on the market until exchange. You will be very hard pressed to find buyers this way, especially in this market when gazumping is a real worry for people. We went with keeping the house on the market until the buyers instructed their solicitor. We needed to find someone quick, so we didn't end up losing our onwards purchase, so we were very cautious of being too strict. Our house is one for FTB, so they are flighty and get spooked by anything out of the norm. We even reduced the price by 2% to make it more attractive to speed up the process, because we didn't want to lose the onward purchase. 

letsbetfair

You'll put off lots of buyers doing this - unless your property is unique, or going at a discount, why would they join in a contract race rather than buy the house down the road with no contract race.
Would an auction be worth considering?

The_Real_Cheddar_Bob

It sounds like you are a bit bitter, which is understandable. If you can you need to put this feeling to one side, understand you might lose your onward purchase and just start again. If you don't do this you will likely end up in this situation and become more desperate. 

steampowered

Why would a potential buyer invest thousands of pounds in trying to exchange on your property - appointing conveyancers; having a survey done; getting a mortgage sorted - when you are making it clear from the outset that you are open to gazumping? 

I wouldn't. 

Gavin83

I agree with the others. This would be a deal breaker for me and I wouldn’t consider offering on your house. I suspect many would feel the same. It’s likely you’ll lose a fairly significant amount of money going down this route.

eddddy

Like others say, I think you'll find it hard to find 2 or more buyers who are prepared to go into a contract race. (I think the memo of sale is the least of the problems.)

Even if it's just 2 buyers in the race - they each have a 50% chance of losing £100s or maybe £1000s in legal fees, survey fees, mortgage fees etc. That's a big gamble.

But if you can find 2 buyers who are willing, you'd then have to find a solicitor who was willing as well. They'd be dealing with 2 buyers, so double the work - and therefore probably double the fee. 

Redwino222

Agree with everyone on this,  there is no way I would buy any house under those circumstances.  

How bloody stressful, you never know who many people will be going through the conveyancing process at the same time.

 I haven’t exchanges contracts yet and have already spent around £2k.  I know I could lose this, but the risk of that would be much higher under your proposed arrangements. Never mind the water time and emotional investment.

Falafels

I can understand why you're bitter and disappointed about your situation, but you won't be helping yourself by imposing such stringent conditions on potential purchasers.

I wouldn't consider putting in an offer where the vendor had made it clear they would continue to market the property until exchange had happened; would you accept an offer from a purchaser who had made it clear they would look for other properties, and would drop you the moment something better came along? Or, in a different but comparable scenario, would you enter into a relationship with someone who had told you they were actively pursuing other people?

It's always a risk, for both parties. Sometimes properties are withdrawn from the market for reasons beyond the vendor's control; sometimes offers are withdrawn because of circumstances beyond the purchaser's control. The best thing you can do is accept an offer from the most likely candidate, continue in good faith, and have a backup list of interested parties in case the sale falls through - but even if it falls through you can't guarantee they'll still be interested.

Such is life!

Good luck, whatever you decide.

lookstraightahead

Dusk1983 said:

Our sale fell through when the buyers changed their mind after 2 months, and now we're at risk of losing our onward purchase. Naturally we're pretty upset and determined to play hard ball from here on.

We have a new agent marketing the property, and also have a number of private purchasers lined up. Our position is that we refuse to remove the property from sale until contracts are exchanged or money changes hands. Therefore, I think we want to create a contract race. We plan to be clear with everyone about this.

Does anyone have experiences of this or private sales in general? One thing that isn't clear is Memos Of Sale. I guess we need to create a Memo Of Sale ourselves if we sell privately, but in a contract race, would there be a number of these Memos sent out? Are they in any way legally binding?

Sounds awful, I hope your agent informs all viewers prior to viewing so that they don't waste their time.

You're potentially doing the same to your vendor. Sounds like you might have to pull out as well, so what if your contract was legally binding? 

Why did they pull out? Did they have surveys etc done? Was the house valued differently from their offer? Did their buyer pull out? 

AnotherJoe

Is your house so astonishingly attractive or different or lowly priced that people will be queing to buy? Unless so, I agree with everything else, this is a non starter and the best you can do is to attempt to vet the buyers by looking at  factors that minimise the chances of them pulling out. Maybe LTV, why / when they are moving (for example, school term deadline) , need to be near family?