Gazumping
Guardian Unlimited

Gazumping happens when a seller who has already accepted one buyer's offer then goes on to accept a higher offer, pushing the first buyer out of the picture.

Gazumping is ignoring a previously agreed offer for a higher one, whether money has exchanged hands or not. Sounds like Immy is just like the rest to me...?

Although ultimately it is the vendor who agrees to the gazumping not the EA.

quote:

Originally posted by DSGS:
Although ultimately it is the vendor who agrees to the gazumping not the EA.

True, but EAs of integrity* make sure other bidders know the property is no longer on the market. Or at least that's what the better ones do.

* An old fashioned idea that went out with £ s d

so you believe that a seller should be forced into accepting an offer even if there is someone out there willing to pay more.
Whilst I strongly agree that a hand shake or 'my word is my bond' should be adhered to accepting a low offer and 'keeping the books open' in anticipation of a higher offer is absolutely fine as long as the original buyer is well aware and prepared to take the risk.

quote:

Originally posted by cakehead:

quote:

Originally posted by DSGS:
Although ultimately it is the vendor who agrees to the gazumping not the EA.

True, but EAs of integrity* make sure other bidders know the property is no longer on the market. Or at least that's what the better ones do.

* An old fashioned idea that went out with £ s d

And a good thing too it's called progress just as we have stamped out measles and rickets we have stamped out ripping off property sellers!

quote:

Originally posted by immy21:
so you believe that a seller should be forced into accepting an offer even if there is someone out there willing to pay more.[QUOTE]

No, no-one should be forced into anything.

[QUOTE]Originally posted by immy21:
Whilst I strongly agree that a hand shake or 'my word is my bond' should be adhered to accepting a low offer and 'keeping the books open' in anticipation of a higher offer is absolutely fine as long as the original buyer is well aware and prepared to take the risk.

I'd agree this approach is fine provided the buyer is explicitly told the situation.

quote:

Originally posted by cakehead:

quote:

Originally posted by DSGS:
Although ultimately it is the vendor who agrees to the gazumping not the EA.

True, but EAs of integrity* make sure other bidders know the property is no longer on the market. Or at least that's what the better ones do.

* An old fashioned idea that went out with £ s d

errr cos it's illeagal all offers have to be forwarded to the vendor in writing before exchange of contracts witholding them compromises the seller.
Imagine if a higher bidder was blocked by the agent who never informed the vendor of the offer. If they approached the vendor directly the vendor could sue the agent for the difference!

It is up to the vendor if they want to accept a higher offer if vendors have integrity Cakehead gazumping would not exist.
Agents are required in law to put that temptation in front of them we can't make them drink!!!!!!!!!!

Immy - could you elaborate on the example you first gave please. Did the vendor originally approach you or did you have a potential buyer and make the approach to the vendor?

If the vendor had already accepted the offer, verbally or by hand shake, then I think it's underhand to continue to market.

If however, the buyer had been told that the offer was low & would be progressing to sealed bids, that's entirely different.

no he was looking at a property of ours at which point he told us he had agreed a sale to a private buyer on his flat weeks before and the buyer was playing up. We suggested we could sell the flat for 10k more than his agreed 165k we ended up selling it for 20k more. The buyer had been dithering about which mortgage company to use for a month apparently. (no sympathy then)

quote:

Originally posted by immy21:
No he came to us and the sale to the private buyer was just days old.

quote:

Originally posted by immy21:
no he was looking at a property of ours at which point he told us he had agreed a sale to a private buyer on his flat weeks before and the buyer was playing up. We suggested we could sell the flat for 10k more than his agreed 165k we ended up selling it for 20k more. The buyer had been dithering about which mortgage company to use for a month apparently. (no sympathy then)

Which is it? was the sale days old or weeks, with a dithering buyer?

Either way it sounds like the offer had been accepted and the decent thing would be for the vendor to tell the buyer that they were still marketing.

Immy, are you really saying that if I accept an offer on my house, that I can keep it on the market, ask the agent to continue to market it (will he really agree to this?), and encourage other offers? And that this is all OK as long as my buyer is made aware of this? Won't my buyer just tell me to bog off?

And, at what time does the offer become binding? Is it after my buyer has paid for the local searches? The buyer will start paying out for survey fees, legal fees etc more or less straight away. At what point do I tell him he's wasted his money? Am I obliged to refund any of his expenses if I accept a higher offer?

What happens if the buyer offers the asking price? Can I still continue to market it then?

I don't really understand...

Donna of course you can continue to market it, whatever price you accept, and an EA will agree to do it (why wouldn't they). My neighbour accepted an ABOVE asking price offer on his house, yet insisted the EA trundle round more potential buyers practically up to exchange. I don't think he was intending to accept higher offers though, he was just covering his back in case something went wrong with the first buyer. (I have no idea if the buyer, who did successfully complete, knew this was going on, there is no reason they would.) Of course though there is a danger that if the vendor is not honourable, or the buyer runs into problems, they will be tempted by a higher offer during this process and the first buyer will be blown out of the water. However the further forward the transaction is, the less tempting the offer will be as it means starting the process all over again.

Tried to add (stupid edit facility ) yes I agree with you, I don't see how continuing to market a property with a view to accepting higher offers can be 'okay', in that a buyer is unlikely to agree to proceed on those terms - you would have to do it covertly.

I didnt want to say anything in this discussion because one EA ruined our life by gazumping twice and I literally wasted 8-9 months of our lives by which time we should have been living in our own home and saving on rent. I went through the most stressful times of my life because I stupidly trusted them.

Both the times I offered full asking price. I still have doubts that one of the property is owned by them.

birdybird - why do you blame the EA and not the vendor?

Immy - please don't let this sidebar on gazumping stop you from posting more diary entries...

Immy, the EA doth protest too much!
Since when were estate agents the arbiters of moral behaviour?
As babybird observed gazumping has had a serious effect on her purchases. Mine too. I put in an asking price offer on a property, a sale was agreed and the next I knew about someone else being the buyer was when I told the agent who my mortgage was with as they'd requested. No-one had the b*lls to even tell me!

Once a sale has been agreed legitimate EAs inform the would-be purchaser the house is no longer on the market. If the buyer insists that an offer is tabled the agent should ensure that the individual will only be called upon when and if the original offer falls through. Otherwise you're into an anything-goes, morally bankrupt auction with people paying money out under false pretences.
Any time I feel my judgements on Estate Agents are too harsh you confirm my suspicions were right all along. There is such a thing as morality in trade and it is not elastic depending on the circumstances.

But, as Immy has said, unless the vendor has instructed the EA otherwise they are legally bound to put forward all offers. So the vendor has to make the first step here.

quote:

Originally posted by DSGS:
birdybird - why do you blame the EA and not the vendor?

first... I never saw the vendors in those empty properties.
second... both of these were snatched off our hands within 4-5 weeks. Mind you I'm aware of the mortgage doubts they all have about first time buyers. We started by getting a mortgage agreed on principle. And average time as told by another well established non-fancy EA who sold our current house is 6-8 weeks.
third... damn it. I was renting from that shrewful EA and when we told them about our move they never brought any one around to let that house after us.
fourth... This one is about renting from EA. The oven had burnt food left over when we moved in. I didnt have the need to use it until after a week and when I did open it I reported to him and he argued he didnt see anything when they were renovating the property before its been let to us. and during argument he said I might have left that on the oven. Apparently the next week their office sent us the move in inventory report and its detailed in that about the burnt out garlic bread. So ??? we couldnt argue with him anymore. We are not the quarelling kind. We lived with just the hob for all our time in that house.

last... because I cant get over with it even after a year or more I do really hate them ones.

sorry! I honestly am! I shouldnt be categorizing every EA as rude.

I shouldnt be mad at all of them. as with any other things in life there are certain percentage of EA's who are heartless. Some are good.

Our EA hid several things during the viewings of our current house. But we respect him for being humble and nice and understanding. There is no denying of the fact that I've been hurt by the other EA's approach towards first time buyers.

quote:

Originally posted by DSGS:
But, as Immy has said, unless the vendor has instructed the EA otherwise they are legally bound to put forward all offers. So the vendor has to make the first step here.

Yes but if an offer has been formally accepted surely the house is no longer on the market? I agree there is a loophole but the EAs I deal with now just don't work that way. It's for everyone's protection.

If a vendor makes it explicit that they will consider all offers up to and including date x that is another matter.