If you haven’t yet heard of gazumping and gazundering, then you have been lucky enough to not have experienced it! However, you might want to quickly brush up on your knowledge here before reading on!
This week, ministers are supposedly considering to come down hard on buyers and sellers who pull out of a deal at the last minute, or who try to gazump or gazunder each other.
To do this, ministers are considering making house purchases legally binding much earlier in the process, so for example it could be at the stage when the seller accepts an offer.
If either the buyer or seller pulled out afterwards, they would have to pay the other party’s costs as a form of compensation.
In the March Budget Review, the Government said: “We will publish a call for evidence on how to make the process better value for money and more consumer friendly.”
It now appears that the Government is setting themselves up to call for that evidence, through a consultation on speeding up and improving the home buying process.
In Scotland, deals are binding once missives are exchanged, which rules out gazumping and gazundering.
Mark Hayward, managing director of the National Association of Estate Agents, told BBC Radio 5 Live that other possible alternatives could entail having a pre-contract agreement or charging the buyer a deposit, but warned these were unlikely to be popular solutions.
He also warned that the Scottish system, where gazumping is banned, is by no means perfect.
He said: “The Scottish system is sometimes referred to as the ideal system, but if you speak to people in Scotland they may disagree. The onus is on the purchaser who has to have carried out all the checks before making an offer on the off-chance that it would get accepted.
“We perhaps need a hybrid system. In France you have a ten-day cooling-off period after an offer is accepted.”
Hayward added that the whole ‘100-year-old’ legal process of buying a property needed an overhaul.
David Gascoyne, Sales and Lettings Manager at Residential Estates said, ‘The buying process does need a rethink as it is outdated. Time periods for the response of mortgage lenders and solicitors need to be reviewed as gazumping and gazundering are annoying for parties involved and rather than just banning the action of them, tightening timing would have a large impact.’