Banning gazumping would be a huge challenge in law, industry veteran Nick Leeming has warned.
Speaking at the Instinctif Partners Great Housing Market Debate, Leeming, who has received a lifetime award for his contribution to the estate agency industry, said legislation would need to be addressed towards buyers and sellers as there is already a responsibility for estate agents to pass on all offers.
He said: “Any legislation needs to be addressed to the client.
“I think it would be a huge challenge to define in law how you prevent gazumping unless you move to the Scottish system, which goes too far the other way.”
Fellow panellist David Smith, economist and Sunday Times journalist, revealed he was once gazumped, adding: “You pay for solicitor fees, surveys, arrange a mortgage and at the last minute another buyer gets there first.
“This debate comes back periodically. There is a strong argument for reform in this area.”
Nigel Terrington, chief executive of Paragon, warned that the Scottish system, where gazumping is banned, isn’t all it’s cracked up to be.
The Government is due to launch a consultation shortly on the house buying and selling process, which is thought to include a proposal to make gazumping illegal.
“Fellow panellist David Smith, economist and Sunday Times journalist, revealed he was once gazumped, adding: “You pay for solicitor fees, surveys, arrange a mortgage and at the last minute another buyer gets there first.”
well im not sure that is correct surely he knew another contract was issued, I think you would need to know the facts of his case to be able to take a correct view on his circumstances, also all clients make the decissions not he agents this all sounds like sour grapes to me, if the agents do their job right and the client (vendor) trusts their agent. Gazzumping could be a thing of the past and we can all move on and read proper reports, and read good ideas to help the property market
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OUTLOAW GAZUMPING by charging a vendor £1000 for pulling out of a sale for any reason. Buyer gets compensation for time wasting. Greedy vendors might think twice then and also end timewasters who only seem to be able to decide to move a day before exchange of contracts. (Yes i do mean any person over the age of 70!!! )
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I agree, outlawing gazumping completely might well prove problematic. Reducing the amount of times it takes place, by reducing the amount of time between offer and exchange is probably a better aim.
The Government will shortly be issuing a ‘call for evidence’ on the home buying and selling process. Make sure you have your say when it does.
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It will be difficult, but it really has to change. It causes a massive amount of stress, waste of money and people’s time, including the vendors, the purchasers, the agents, surveyors, building societies and the solicitors. However, usually only the last THREE of the aforementioned can actually benefit from this archaic process. Would this be the reason that we still have not updated conveyancing law?
I wrote an article about this over a year ago: http://www.landlordsandletting.co.uk/Blog/improving-the-english-conveyancing-process/#comments
I’d be interested to see if others feel it could provide a solution. Almost anything is better than the current busted system.
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There has always been the argument that “the system” is happy stay as it is, as often their are those in the system that benefit financially every time it falls through. Gazumping could be stopped very easily, a sale agreed is a sale agreed. Don’t get confused with conveyancing pits falls. That’s another story.
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In your article, I think you are hinting at a Lock Out agreement. As I understand it, with the review about to take place, all things will be considered.
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My tuppence worth would be to have properties prepared in the same way that properties for auction are i.e. a contract for sale drawn up before the property is advertised, thus identifying those pesky land registry / title issues / whoops we can’t find the deeds / leasehold information for flats etc… Or at the very least all of the aforementioned commenced at the point that the property is first marketed.
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Are we talking gazumping or conveyancing process issues?
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That will be some kind of Home Information Pack then Mark? That’s a £1 in the swear box for me.
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Jonathan Smithers, the President of the Law Society stated he believes gazumping isn’t necessarily a problem, stating that 50% of the people involved in a gazumping situation benefit. Fair comment?
http://www.todaysconveyancer.co.uk/jonathan-smithers-believes-gazumping-isn-t-going-away-as-research-reveals-it-causes-21-of-collapsed-sales-cms-16286
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Thank you, Mr Hailstone, for the link to that article. Puts things somewhat in perspective:
27% of sales agreed fail to complete
21% of fall-throughs are put down to ‘Gazumping’
So only 5.67% of the total number of transactions feature ‘Gazumping’. That will be why, in over three years back walking in the moccasins I’ve never had a single case, then. Some unlucky bu99er has had two and therefore nicked my share.
…the largest number blame conveyancers, with 48% putting the blame on the legal side of the transaction…
I wouldn’t argue there, based purely on personal/professional experience.
50% of the people involved in a gazumping situation benefit.
Percentages clearly ain’t this guy’s forte. On the basis that there are THREE parties involved in a bidding situation that is given the name ‘Gazumping’ it is fairly inevitable that one will end up losing out. Therefore 67% ‘win’ – and 33% ‘lose.
Fair comments?
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