Posted by Admin - 16/05/2016
Ministers are reportedly considering to make property purchases legally binding much earlier on in the process to avoid gazumping and gazundering.
Gazumping: This is where a buyer outbids another buyer who has already put down an offer.
Gazundering: This is where a buyer lowers their offer just as contracts are being exchanged.
The proposal is that if the sale were to fall through because either the buyer or seller pulled out after the offer had been accepted, they would be liable for the other party’s costs.
“We will publish a call for evidence on how to make the process better value for money and more consumer friendly”. This was what the Government announced in the March Budget and it seems they are now entering the consultation process on how to speed up and improve the home buying process.
Managing Director of the National Association of Estate Agents has said that the alternatives to our current method could be to charge the buyer a deposit or to have a pre-contract agreement however he suggested these would be very disfavoured solutions.
One popular proposal is to adopt France’s approach where there is a 10 day cooling-off period when an offer has been accepted. Another is to have a complete review of the process and outline minimum time periods that solicitors and lenders have to respond.
Gazumping can cause buyers to run into thousands of pounds worth of fees through surveys and legal fees which will add to the disappointment of not securing the home they wanted.