Saturday, 2 December 2017

The dreadful practice of gazumping ...

I don't know about you, but buying a home is stressful enough without people swindling you out of it. To me, in England at least, if you put in an offer on a house, and it is accepted by the sellers, then that offer should stand. No-one else should be able to come along and pinch your house off you, because they offer more money!

Years ago, when we were looking at buying, we were quite often encouraged by estate agents to put in higher offers on houses we liked, even though an offer had already been accepted.

This smacks of greed and a complete lack of morals on their behalf, as lets face it, a higher offer gives them more commission and I am sure, is their main reason for encouraging such a diabolical practise.

A family member (cash buyer), was recently gazumped out of their future home by the sellers, despite the sellers wanting a quick sale.  I'm sure karma will have something to say about that further down the line. As it happens, they have now put in an offer on a similar sized house, far cheaper, and have begun the buying process once more. I hope they succeed this time.

Have you ever been gazumped, or been encouraged to gazump?

Have a great weekend everyone.

14 comments:

  1. We were buying a bungalow that had no deeds so we agreed with our home sale people to move out and rent while the deeds were pieced together. The land had been a gift and the man had built the bungalow. My solicitor smelt a rat too late unfortunately. We had a phone call to say we could either come up with another £30k or forget the bungalow. We told them to stuff it basically!!! Karma prevailed it took another year to sell.

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  2. Here in Canada if an offer is accepted, it is very hard to get out of. I only know of one person who accepted one offer only to turn it down in favour of another more money offer. I even think he had to pay off the first buyer.

    God bless.

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    1. I think thins might be different in Scotland.

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  3. In the U.S., some states allow the later acceptance of a higher offer, while others do not. You don’t mention it, but was a deposit or “earnest” money put down by the buyers upon acceptance of the offer? This is common practice in the U.S. when purchasing real estate, and helps bind the agreement. And yes, the estate agent makes a bit more on a higher sale price, but the real beneficiary is the seller, whom the agent is working for. The agent is simply doing their best for their client.

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    1. No deposit. Over here the money is not exchanged until completion, if I remember correctly.

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    2. Not quite. Normally a 10% deposit is paid at exchange of contracts and the balance on completion when it becomes legally yours. You lose the deposit if you renege after exchange of contracts. However, to get to the exchange of contract point a written offer has been accepted and much of the legal work undertaken as well as a survey etc. So gazumping is a legal but dastardly practice in my view.

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    3. Thanks for that, we haven’t bought for 30 odd years but I knew a deposit wasn’t paid up front straight away.

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  4. My youngest just bought his house. Here in Alberta, you make an offer with an upfront deposit and a date you want possession. It's up to the owner to counter offer if they want more.

    Some houses, at certain time of year will draw multiple offers. You know this going on because they usually play coy by saying owner unable to look at offers until whenever.

    I remember selling one house in three hours. My realtor was like don't accept until Monday when all the local realtors have had time to look at it, we'll get you at least $15K more than you listed for. We just said, er no. Offer is asking price and it's $60K more than we paid for it. Deal done.

    I just don't understand how the English system is legal.

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  5. We had the opposite when we sold our house. At the last minute our buyer wanted to offer thousands less than the agreed price. We worked something out in the end but I was not happy with them at all. I admit on moving day I was pretty petty and didn't clean the house as thoroughly as I would usually have done and I kept the champagne and flowers we'd bought for them and enjoyed them in my new home.

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    1. That is appalling. Didn’t think they could do that once an offer was acceped. I wouldn’t have cleaned at all.

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  6. This is random sorry - but I see you have her in your blog list. What has happened to Frugal Queen - she seems to have disappeared from blog, instagram and facebook??? Anyone know if she is ok please?

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    1. No idea. The same thing has happened to other bloggers such as frugal mummy. That turned out to be a domain issue.

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