The spotlight has been shone on the murkiest corner of property purchase, the threat that every buyer dreads – gazumping.
Nearly 65,000 potential buyers lost out on their property purchase last year, with sales collapsing due to the vendor accepting a higher offer from another bidder. Estate agents are legally bound to pass on every offer made on a property, regardless of how far progressed a sale is, and with such a buoyant market causing bidding wars on many properties, it is not uncommon for a seller to have their head turned by a higher offer.
As well as being a frustrating situation, being gazumped can also be costly – a problem that cost buyers a whopping £170 million in 2015, according to government figures. Many buyers commit to legal fees and surveys on a property in the hopes that this will speed up a sale and secure their new home, only to have the rug pulled out from beneath them.
However, this frustrating situation could be all set to change. Policymakers at the Department for Business, Innovation and Skills, along with senior figures at the National Association of Estate Agents have been meeting to discuss what changes could be made to the system to ensure the end of this outdated method.
The primary option being discussed is to introduce a method similar to that which exists already in Scotland. Over the border, a house purchase is legally binding once an offer is accepted. Should either the buyer or seller wish to pull out one this legal deal has been done, the person who breaks the chain must pay the other party’s costs.
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