ASK THE EXPERT - GAZUMPUMPING
ASK THE EXPERT
Q. We recently had an offer accepted on a property, only to be gazumped several weeks into the buying process. Is there any action we can take against the agent?
A. The first point to make is that gazumping is not illegal – despite regular calls from consumer groups and certain politicians for it to be made so. The fact is that under our system, nothing is legally binding on either seller or buyer until exchange of contracts. Up to that point, both parties are entirely free to change their minds.
As for whether gazumping is morally wrong, that rather depends on your point of view. After all, the people doing the gazumping will presumably view it as nothing more than a perfectly legitimate use of their greater buying power, while sellers may simply see it as part of the process of securing the best possible price for their home.
Not that I condone gazumping in the least. It can be very distressing indeed – though arguably no more so than it is for a seller to be “gazundered. This is the term given to the practice favoured by a certain type of buyer, who cynically waits until just before contracts are exchanged, before suddenly pulling their original offer and substituting a new, lower one.
Which brings me to the final part of your question. And, without knowing the precise details of your case, I put it to you that the agent was probably entirely blameless. After all, it is the vendor who decides which offer to accept, while estate agents themselves are legally bound to continue passing on all offers, right up to exchange.
But, you may argue, surely any agent on a percentage fee has a direct financial interest in gazumping? Well, no. Remember, we only get paid when a sale actually completes – and that takes quite long enough as it is. No agent I have ever met would willingly switch horses in mid-transaction for the sake of a few extra pounds, several weeks or even months later!
Ultimately, your only defence against being gazumped is 1) to make your first offer your very best offer, and 2) to ensure you are ready to proceed to exchange of contracts as quickly as possible. The shorter the time a transaction takes, the fewer opportunities for abuses, by either party.
In short – be prepared!