Gazumped - what to do

bennimc

Hi folks. Just looking for your sage advice on this situation we find ourselves in. 
We last week had an offer accepted on a property of £575k, which was 20k under guide price (but probably an overinflated listing to begin with - it had been on market for months). 
Today we've been told that the vendor has accepted another offer from another party and now wants to go to sealed bids.
I know legally he can do this - but ethically it makes me angry. We've done four 250 mile round trips, commissioned builders for quotes etc etc. 
I have no idea if the other party genuinely exists or they have proved funds. 
Feel like the vendor is a liability going forward if he can't abide by a gentleman's agreement and changes his mind at the sniff of money. 
I guess this is more of a vent than anything - thanks for your counsel! 

Golden_Glow90

Ultimately, it depends how much you like this house.  If you want to keep it, the put in a bid.  If you believe there isn't another party and it's a case of them trying to get a higher price, try calling their bluff and only increase your bid slightly, or if you really want the house then put in the highest price you're willing to pay.  Just be careful with this though as a lot of mortgage lenders at the moment are undervaluing houses.

eddddy

bennimc said:

 
I have no idea if the other party genuinely exists or they have proved funds. 

I doubt that the estate agent has invented another party, because...

• It would be illegal for estate agent to 'make-up' buyers/offers (although quite a few estate agents don't seem to be too worried about breaking the law.

• The estate agent has your offer of £575k accepted - that probably means a commission fee of around £5750.  They won't want to risk irritating you into walking away, by messing you about with fictitious buyers/offers - and therefore losing £5750.

• If 'best and final' offers takes the price upto £600k - that's probably an extra £250 for the estate agent. I doubt they really want to faff about with this for 2 or 3 days, for the sake of an extra £250.  (They'd rather spend those 2 or 3 days trying to sell another property on their books, to earn them another £5750 instead).

bennimc

No don't think that it is likely it's been made up. Minded to put in a sealed bid offer of '£1,000 above theirs'. 

cymruchris

This is always a tricky one - if you were selling a car for £10k, and someone said I'll give you £9k, I just need to get a couple of quotes on rust removal, and then arrange some finance, and then I should be able to pick it up in a fortnight, and then someone else came along and said I really like your car, I've got £9750 cash and can pick it up tomorrow - what might you do? On principle you've agreed to sell it for £9k, but an extra £750 would be nice. Would you take the higher, easier, quicker offer?

You don't know the position of the other buyer - but they might be more favourable than you in terms of their position (But of course you don't know anything for sure.)

Whatever asset we are selling, we always want the best price for it - who wouldn't? 

I can understand a seller who receives a better offer switching to a different buyer, although it would leave a sour taste (and more) in the mouth of the previously agreed buyer.

If it's a house you really want, really like, and see it as a long-term home, then a few thousand different is a fair chunk of money, but isn't a great deal over the course of a decade or so.... 

If it's something you can't accept, or if you have genuine worries about the seller, and there are other properties on your shortlist, then pull out and offer on another property. It's a bit of a cut-throat world out there sometimes. 

Only you can decide if it's worth the increase in price (and if your finances can support it) - but don't cut your nose off to spite your face. In this case it's not a car with a few rusty spots - it's your potential long-term home. So if it ticks all the boxes, and the finances can support it, then go for it, and don't let a sour-taste linger. 

Flugelhorn

bennimc said:

No don't think that it is likely it's been made up. Minded to put in a sealed bid offer of '£1,000 above theirs'. 

and they put in an offer of £1000 above yours .. hmm not how it works

bennimc

There's actually a paragraph in Kirstie Allsop's book where she recommends putting in a '£1000 more than other offer' bid

Zerforax

If you do buy the house, it comes without the seller so doesn't really affect whether you want to buy the house or not, or how much you want to buy it. Just take the emotion out and view it as a transaction. Yes it's all ugly and leaves a bad taste.

JReacher1

You went in £20k less so I think you are always at risk of being gazumped. Unfortunate but that is one of the risks with going under asking price. 

aoleks

Kirstie Allsopp is a lady that's completely detached from reality, I wouldn't take her advice on what toilet paper to buy.

Section62

JReacher1 said:

You went in £20k less so I think you are always at risk of being gazumped. Unfortunate but that is one of the risks with going under asking price. 

It's a risk whatever you offer.  You could go in at £20k over asking and still get gazumped for an extra £100.

Me in the OP's position.... I'd be sorely tempted to put in a sealed bid of £25k over asking, then change my mind in a couple of weeks time (having found a different property to buy in the meantime).